Genesis Energy 8-K 11-15-2006
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): November 15, 2006
GENESIS
ENERGY, L.P.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-12295
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76-0513049
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(State
or other jurisdiction of
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(Commission
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(I.R.S.
Employer Identification No.)
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incorporation
or organization)
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File
Number)
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500
Dallas, Suite 2500, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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(713)
860-2500
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
___
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
___
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240-14a-12)
___
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240-14d-2(b))
___
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240-13e-4(c)
Item
1.01. Entry into a Material Definitive Agreement
Genesis
Energy, L.P. replaced its existing credit facility with a $500 million Senior
Secured Revolving Credit Agreement dated November 15, 2006 between Genesis
Crude
Oil, L.P. and a syndicate of lenders. A copy of this agreement is attached
hereto as Exhibit 10.1 and is incorporated herein by reference.
Our
new
credit facility, with a maximum facility amount of $500 million, is with a
group
of banks led by Fortis Capital Corp. and Deutsche Bank Securities Inc. The
initial committed amount under our facility is $125 million, of which a maximum
of $50 million may be used for letters of credit. The committed amount
represents the amount the banks have committed to fund pursuant to the terms
of
the credit agreement. The initial borrowing base under the facility is
approximately $88 million, and will be recalculated quarterly and at the time
of
acquisitions. The borrowing base represents the amount that can be borrowed
or
utilized for letters of credit from a credit standpoint based on our EBITDA
(earnings before interest, taxes, depreciation and amortization), computed
in
accordance with the provisions of our credit facility. The commitment amount
can
be increased up to the maximum facility amount for acquisitions or internal
growth projects with approval of the lenders. Likewise, the borrowing base
may
be increased to the extent of EBITDA attributable to acquisitions.
Interest
on amounts borrowed under the new facility is equal to (i) either the applicable
Eurodollar settlement rate or the higher of the federal funds rate plus ½ of 1%
or Fortis’s prime rate for the relevant period, at our option, plus (ii) the
applicable margin rate. We are required to pay our credit facility lenders
a fee
based upon amounts committed but not utilized by outstanding borrowings or
letters of credit, as well as certain other fees.
We
must
comply with various affirmative and negative covenants contained in our new
credit facility. Among other things, these covenants limit our ability
to:
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incur
additional indebtedness or liens;
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make
loans, investments or guarantees;
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acquire
or be acquired by other companies;
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enter
into or amend certain existing agreements;
and
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enter
into any hedging agreement for speculative
purposes.
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Our
new
credit facility covenants also require us to achieve specific minimum financial
metrics. For example, we must maintain a debt service coverage ratio of at
least
3.0 to 1.0. In general, this calculation compares EBITDA (as adjusted in
accordance with the credit facility), to interest expense. At September 30,
2006, the calculation resulted in a ratio of 17.9 to 1.0. Our credit facility
also requires that we meet or exceed certain other financial ratios, such as
a
leverage ratio and funded indebtedness to capitalization ratio. If we meet
these
financial metrics and are not otherwise in default under our credit facility,
we
may make quarterly distributions; however the amount of such distributions
may
not exceed the sum of the distributable cash generated by us for the eight
most
recent quarters, less the sum of the distributions made with respect to those
quarters.
The
covenants described above could prevent us from engaging in certain transactions
which might otherwise be considered beneficial to us. For example, they
could:
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increase
our vulnerability to general adverse economic and industry
conditions;
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limit
our ability to make distributions; to fund future working capital,
capital
expenditures and other general partnership requirements; to engage
in
future acquisitions and construction or development activities; or
to
otherwise fully realize the value of our assets and opportunities
because
of the need to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness or to comply with any
restrictive terms of our indebtedness;
and
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limit
our flexibility in planning for, or reacting to, changes in our businesses
and the industries in which we
operate.
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Our
credit facility contains customary events of default, including for non-payment
of principal and interest, failure to comply with any covenant, default under
certain other of our indebtedness, the incurrence of specified amounts of
liabilities relating to adverse judgments, unpaid ERISA obligations or
environmental claims, and the occurrence of a change in control.
Our
credit facility is secured by a guarantee from all of our restricted
subsidiaries (as defined in our credit agreement) and us and by liens on
substantially all of the assets of those parties. Generally, our new credit
facility is non-recourse to our general partner.
Item
1.02. Termination of a Material Definitive Agreement
Concurrent
with entering into our new credit facility, we paid off and terminated our
old
credit facility that certain credit agreement dated June 1, 2004 between Genesis
Crude Oil, L.P., Genesis Energy, Inc., Genesis Energy, L.P., Fleet National
Bank
and certain financial institutions. We did not incur any material penalties
in
connection with such termination. However, we did incur a non-cash write-off
of
$0.6 million of previously capitalized fees and expenses.
Item
2.03. Creation of a Direct Financial Obligation or an Off-Balance Sheet
Arrangement of a Registrant
See
description in 1.01 above.
Item
8.01. Other Events
A
copy of
our press release announcing the closing of our new credit facility is attached
as Exhibit 99.1 and is incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits
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(a)
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Financial
statements of businesses acquired.
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Not
applicable
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(b)
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Pro
forma financial information.
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Not
applicable.
(c)
Exhibits
The
following materials are filed as exhibits to this Current Report on Form
8-K.
Exhibits.
10.1 Credit
Agreement dated as of November 15, 2006 among Genesis Crude Oil, L.P., Genesis
Energy, L.P., the Lenders Party Hereto, Fortis Capital Corp., and Deutsche
Bank
Securities Inc.
99.1 Press
release dated November 16, 2006.
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 thereunto
duly authorized.
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GENESIS
ENERGY, L.P.
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(A
Delaware Limited Partnership)
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By:
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GENESIS
ENERGY, INC., as
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General
Partner
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By:
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/s/
Ross
A. Benavides
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Ross
A. Benavides
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Chief
Financial Officer
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