UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 27, 2023, Calumet Specialty Products Partners, L.P. (the “Partnership”) and Calumet Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”) issued $325.0 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2028 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were issued at par for net proceeds of approximately $319.1 million, after deducting the initial purchasers’ discount and estimated offering expenses. The Partnership has used, or intends to use, a portion of the net proceeds from the offering of the Notes to fund offers (collectively, the “Tender Offers”) to purchase (i) any and all of its outstanding $200.0 million in aggregate principal amount of 9.25% Senior Secured First Lien Notes due 2024 (“2024 Secured Notes”) and (ii) up to $100.0 million in aggregate principal amount of its outstanding 11.00% Senior Notes due 2025 (“2025 Notes”) and pay related premiums and expenses, with the remaining net proceeds to be used for general partnership purposes, including debt repayment.
On June 28, 2023, in connection with the early settlement of the Tender Offers, the Partnership used approximately $125.5 million (excluding accrued and unpaid interest and related expenses) of the proceeds from the offering of the Notes to fund the repurchase of (i) approximately $21.0 million in aggregate principal amount of 2024 Secured Notes and (ii) $100.0 million in aggregate principal amount of 2025 Notes and pay related premiums. The Partnership intends to redeem, at some point after July 15, 2023, any amount of 2024 Secured Notes that remain outstanding after the expiration of the Tender Offer for the 2024 Secured Notes, at par, plus accrued and unpaid interest to, but not including, the redemption date. This Current Report on Form 8-K does not constitute a notice of redemption for the 2024 Secured Notes, and any redemption of 2024 Secured Notes that remain outstanding following the expiration of the Tender Offers will be made only pursuant to the terms of the applicable notice of redemption delivered pursuant to the terms of the indenture governing the 2024 Secured Notes.
The Notes are governed by an Indenture, dated as of June 27, 2023 (the “Indenture”), entered into by the Issuers and certain subsidiary guarantors named therein (the “Guarantors”) with Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes will mature on July 15, 2028. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2024. The Notes are guaranteed on a senior unsecured basis by all of the Partnership’s existing subsidiaries (other than Finance Corp., the Partnership’s unrestricted subsidiaries, Montana Renewables Holdings LLC and Montana Renewables, LLC, and certain immaterial restricted subsidiaries).
On and after July 15, 2025, the Issuers may on any one or more occasions redeem all or part of the Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus any accrued and unpaid interest to the applicable redemption date on such Notes, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
| Year |
Percentage | |||
| 2025 |
104.875 | % | ||
| 2026 |
102.438 | % | ||
| 2027 and thereafter |
100.000 | % | ||
At any time prior to July 15, 2025, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of the Notes issued under the Indenture in an amount not greater than the net cash proceeds from certain public equity offerings at a redemption price of 109.750% of the principal amount of the Notes, plus any accrued and unpaid interest to the date of redemption, provided that: (1) at least 60% of the aggregate principal amount of the Notes issued under the Indenture remains outstanding immediately after the occurrence of each such redemption (excluding notes held by the Partnership and its subsidiaries); and (2) the redemption occurs within 180 days of the date of the closing of such public equity offering.
Prior to July 15, 2025, the Issuers may on any one or more occasions redeem all or part of the Notes at a redemption price equal to the sum of: (1) the principal amount thereof, plus (2) the Make Whole Premium, as defined in the Indenture, at the redemption date, plus any accrued and unpaid interest to the applicable redemption date.
The Indenture contains covenants that, among other things, restrict the Partnership’s ability and the ability of certain of its subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue preferred units; (ii) create liens to secure indebtedness; (iii) pay dividends on equity securities, repurchase equity securities or redeem
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subordinated indebtedness; (iv) make investments; (v) restrict dividends, loans or other asset transfers from its restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of its properties to, another person; (vii) sell or otherwise dispose of assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates. These covenants are subject to important exceptions and qualifications. However, at any time when the Notes are rated investment grade by either of Moody’s Investors Service, Inc. or S&P Global Ratings and no Default or Event of Default, each as defined in the Indenture, has occurred and is continuing, many of these covenants will be suspended.
Upon the occurrence of certain Change of Control Trigger Events, as defined in the Indenture, each holder of the Notes will have the right to require that the Partnership repurchase all or a portion of such holder’s Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase.
The foregoing description of the Indenture is qualified in its entirety by reference to the full text of the Indenture, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 8.01 | Other Events. |
On June 27, 2023, the Partnership issued a press release announcing the early results of the Tender Offers, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Partnership’s control. All statements, other than historical facts included in this Current Report on Form 8-K, are forward-looking statements. All forward-looking statements speak only as of the date of this Current Report on Form 8-K. Although the Partnership believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 4.1 | Indenture, dated June 27, 2023, by and among the Issuers, the Guarantors and the Trustee, relating to the offering of the Notes. | |
| 4.2 | Form of 9.75% Senior Notes due 2028 (Included in Exhibit 4.1). | |
| 99.1 | Press Release announcing the early results of the Tender Offers, dated June 27, 2023. | |
| 104 | Cover Page Interactive Data File- the cover page XBRL tags are embedded within the Inline XBRL document. | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. | ||||||
| By: | CALUMET GP, LLC, | |||||
| its General Partner | ||||||
| Date: June 29, 2023 | By: | /s/ Vincent Donargo | ||||
| Name: | Vincent Donargo | |||||
| Title: | Executive Vice President and Chief Financial Officer | |||||
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