Delek US Holdings, Inc. announced that it has closed on a new $1.0 billion senior secured revolving ABL credit facility and a $700.0 million senior secured term loan B. These Facilities are expected to simplify the debt structure as they consolidate borrowings at the Delek US Holdings, Inc. level, while reducing overall interest expense. Proceeds from these Facilities will be used to repay outstanding borrowings under several debt instruments and for other corporate purposes.
Kevin Kremke, EVP and Chief Financial Officer of Delek US remarked: "Both the Revolver and Term Loan were oversubscribed, and we appreciate the strong support from our lender group. This financing provides additional financial flexibility to Delek US and simplifies our debt structure. It was an important step to improve our cost of capital and should bring us closer to capturing approximately $30 million of cost of capital synergies on an annualized basis that we outlined as part of the Alon USA transaction."
The terms and conditions of the new $1.0 billion Revolver include a springing compliance requirement with a minimum fixed charge coverage ratio financial covenant if excess availability under the revolver borrowing base is below certain thresholds, as defined in the credit agreement. Borrowings under this the Revolver bear interest at a rate of LIBOR plus 1.25 to 1.75 percent based on excess availability. The maturity date is March 30, 2023. Approximately $300 million was borrowed on the Revolver at closing of the transaction. The joint lead arrangers and joint book runners for the Revolver were Wells Fargo Bank, National Association, Barclays Bank PLC, Regions Capital Markets, and SunTrust Robinson Humphrey, Inc.
The $700.0 million Term Loan carries an interest rate of LIBOR plus 2.50 percent and matures on March 30, 2025. It does not have any financial maintenance covenants and was fully drawn at close. The joint lead arrangers and joint book runners for the Term Loan were Wells Fargo Securities, LLC, Barclays Bank PLC, Regions Capital Markets, and SunTrust Robinson Humphrey, Inc.
Wells Fargo Bank, National Association is the administrative agent under both the Revolver and the Term Loan.