UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 14, 2024 (the “Effective Date”), UGI Energy Services, LLC (“UGIES”), a Pennsylvania limited liability company and an indirect, wholly owned subsidiary of UGI Corporation, entered into that certain Fourth Amended and Restated Credit Agreement (the “Revolving Credit Agreement”), by and among UGIES, JPMorgan Chase Bank, N.A., as administrative agent, PNC Bank, National Association, as syndication agent, Citizens Bank, N.A., MUFG Bank Ltd. and Wells Fargo Bank, National Association, as co-documentation agents, JPMorgan Chase Bank, N.A., Citizens Bank, N.A., MUFG Bank Ltd., PNC Capital Markets LLC and Wells Fargo Bank, National Association, as joint bookrunners and joint lead arrangers and the financial institutions from time to time party thereto as lenders (collectively, the “Lenders”).
The Revolving Credit Agreement amends and restates the Third Amended and Restated Credit Agreement, dated as of March 6, 2020, in its entirety and provides for a $300 million senior secured revolving credit facility, including an up to $50 million sublimit for the issuance of letters of credit. UGIES has the option to increase the commitments under the Revolving Credit Agreement by up to an additional $75 million, to a total of $375 million, upon the receipt of commitments from one or more lenders and subject to the terms and conditions of the Revolving Credit Agreement. The Revolving Credit Agreement is available to fund permitted acquisitions and other investments, to finance the working capital needs of UGIES and its subsidiaries and for general corporate purposes in the ordinary course of business.
At UGIES’ election from time to time, borrowings under the Revolving Credit Agreement will bear interest at a floating rate of, at the option of UGIES, either (x) Term SOFR plus the Applicable Rate (as defined in the Revolving Credit Agreement) plus a credit spread adjustment of 0.10%, or (y) the base rate plus the Applicable Rate. The Applicable Rate for ABR Loans ranges from 0.75% to 1.75% and for loans based on Term SOFR from 1.75% to 2.75%, depending on the leverage ratio of UGIES.
The Revolving Credit Agreement has a maturity date of May 14, 2028. UGIES may voluntarily prepay its borrowings under the Revolving Credit Agreement, in whole or in part, without any premium or penalty. The Revolving Credit Agreement requires compliance with conditions precedent that must be satisfied prior to any borrowing.
The loans under the Revolving Credit Agreement (the “Loans”) are guaranteed by certain of UGIES’ domestic subsidiaries (the “Guarantors”), which are subsidiaries that contribute greater than 10.0% individually of UGIES’ Consolidated EBITDA (as defined in the Credit Agreement) or 10.0% individually of UGIES’ Consolidated Total Assets (as defined in the Credit Agreement) (provided that UGIES’ immaterial domestic subsidiaries that are not Guarantors shall not contribute greater than 15.0% in the aggregate of UGIES’ Consolidated EBITDA or 15.0% in the aggregate of UGIES’ Consolidated Total Assets).
The Loans are secured by substantially all of the assets of UGIES and the Guarantors, subject to certain exceptions and carveouts including, but not limited to, accounts receivables and certain real property (the “Collateral”). The Collateral also secures UGIES’ term loan credit facility with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the lenders party thereto from time to time (the “Term Loan Facility”). The rights of the respective secured parties under the Revolving Credit Agreement and the Term Loan Facility in and to the Collateral are governed by an intercreditor agreement.
The Revolving Credit Agreement contains customary representations and warranties and affirmative and negative covenants for agreements of this type, including, among others, covenants relating to financial reporting, compliance with laws and material contractual obligations, payment of obligations including tax liabilities, preservation of existence, books and records and inspection rights, maintenance of properties and insurance, limitations on indebtedness and liens, restrictions on mergers and sales of assets, and limitations on investments, restricted payments and transactions with affiliates. In addition, the Revolving Credit Agreement requires UGIES to abide by certain financial covenants, as follows: (i) a ratio of not more than 4.00 to 1.00 (or 4.50 to 1.00 during an Acquisition Period (as defined in the Revolving Credit Agreement)) of Consolidated Total Indebtedness (as defined in the Revolving Credit Agreement) to Consolidated EBITDA (as defined in the Revolving Credit Agreement) for each of the four most recently completed fiscal quarters; and (ii) a ratio of not less than 3.50 to 1.00 of Consolidated EBITDA to Consolidated Interest Expense (as defined in the Revolving Credit Agreement) for each of the four most recently completed fiscal quarters (each ratio is calculated as of the end of each fiscal quarter).
The Revolving Credit Agreement provides for customary events of default, including, among other things, in the event of nonpayment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect in any material respect when made, failure to perform or observe covenants within a specified period of time, a cross-default to other indebtedness of a specified amount, the bankruptcy or insolvency of UGIES or any of its restricted subsidiaries, monetary judgment defaults of a specified amount, change of control, and ERISA defaults resulting in a material adverse effect. In the event of a default by UGIES, the administrative agent may, and at the request of the requisite number of Lenders shall, declare all amounts owed under the Revolving Credit Agreement immediately due and payable. For defaults related to insolvency and receivership, all outstanding loans and other amounts will become immediately due and payable. Under the terms of the Revolving Credit Agreement, a 2% interest penalty may apply to any outstanding amount not paid when due or that remains outstanding while an event of default exists.
The foregoing description of the Revolving Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Revolving Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above in Item 1.01 regarding the Revolving Credit Agreement is hereby incorporated into this Item 2.03 by reference, insofar as it relates to the creation of a direct financial obligation. This description is qualified in its entirety by reference to the full text of the Revolving Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1 | Fourth Amended and Restated Credit Agreement, dated as of May 14, 2024, by and among UGI Energy Services, LLC, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL). |
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.
| UGI Corporation | ||
| Date: May 17, 2024 | By: | /s/ Jessica A. Milner |
| Name: | Jessica A. Milner | |
| Title: | Secretary | |