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): April 7, 2009 (April 13, 2009)
HOLLY CORPORATION
(Exact name of Registrant as specified in its charter)
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| Delaware
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001-03876
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75-1056913 |
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(Commission File Number)
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(I.R.S. Employer |
| incorporation)
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Identification Number) |
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| 100 Crescent Court,
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75201-6915 |
| Suite 1600
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(Zip code) |
| Dallas, Texas |
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| (Address of principal |
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| executive offices) |
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Registrant’s telephone number, including area code: (214) 871-3555
Not applicable
(Former name or former address, if changed since last report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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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.
On April 7, 2009, Holly Corporation (the “Borrower”) entered into a $300 million Second
Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as
administrative agent, swing line lender, and L/C issuer, UBS Loan Finance LLC and U.S. Bank
National Association, as co-documentation agents, Union Bank of California, N.A. and Compass Bank,
as syndication agents, and certain other lenders from time to time party thereto. The Credit
Agreement amends and restates the existing senior secured credit agreement of the Borrower in its
entirety.
The Credit Agreement has a term of approximately four-years, maturing on March 14, 2013, and
is a senior secured revolving credit facility that may be used for revolving credit loans
(including up to $40 million of swing line loans) and letters of credit from time to time. The
Credit Agreement is available to fund capital expenditures and acquisitions, for working capital
and general corporate purposes, and to refinance all amounts owing under the existing senior
secured credit agreement.
The Borrower has the right to request an increase in the maximum amount of the Credit
Agreement of up to $150 million, which would bring the maximum amount of the Credit Agreement to a
total of $450 million. The request will become effective if (a) certain customary conditions
specified in the Credit Agreement are met and (b) one or more existing lenders under the Credit
Agreement or other financial institutions approved by the administrative agent commit to lend the
increased amounts under the Credit Agreement.
The Borrower’s obligations under the Credit Agreement are secured by the inventory and
accounts receivable of the Borrower and its wholly-owned subsidiaries designated as Restricted
Subsidiaries in the Credit Agreement. Indebtedness under the Credit Agreement is recourse to the
Borrower and guaranteed by the wholly-owned subsidiaries of the Borrower designated as Restricted
Subsidiaries in the Credit Agreement.
The Borrower may prepay all loans at any time without penalty, except for payment of certain
breakage and related costs.
Indebtedness under the Credit Agreement bears interest, at the Borrower’s option, at either
(a) a base rate equal to the highest of the Federal Funds Rate plus 1/2 of 1%, London Interbank
Offered Rate plus 1% or the prime rate (as publicly announced from time to time by Bank of America,
N.A.), as applicable, plus an applicable margin (ranging from 2.25% to 2.75%) or (b) at a rate
equal to the London Interbank Offered Rate plus an applicable margin (ranging from 3.25% to 3.75%).
In each case, the applicable margin is based upon the ratio (the “Leverage Ratio”) of our
consolidated indebtedness (as defined in the Credit Agreement) to EBITDA (earnings before interest,
taxes, depreciation and amortization, as defined in the Credit Agreement) for a given period. The
Borrower incurs a commitment fee on the unused portion of the commitments (which calculation of
such unused portion excludes amounts borrowed as swing line loans except to the extent that a
lender has purchased a participation in a swing line loan) at a rate of 0.50%.
The Credit Agreement imposes certain requirements, including: limitations on investments
(including distributions to Unrestricted Subsidiaries (as defined in the Credit Agreement));
limitations on our ability to incur debt, make loans, acquire other companies, change the nature of
our business, enter a merger or consolidation, or sell assets; and covenants that require
maintenance of a specified Leverage Ratio and a specified EBITDA to interest expense ratio.
Upon the occurrence, and during the continuance, of an event of default, including but not
limited to nonpayment of principal when due, failure to perform or observe certain terms,
covenants, or
agreements under the Credit Agreement, and certain defaults of other indebtedness, the
administrative agent may terminate the obligation of the lenders under the Credit Agreement to make
advances and issue letters of credit and declare any outstanding obligations under the Credit
Agreement immediately due and payable. In addition, in the event of insolvency (as defined in the
Credit Agreement), the obligation of each lender to make advances and issue letters of credit shall
automatically terminate and any outstanding obligations under the Credit Agreement shall
immediately become due and payable.
The foregoing description of the Credit Agreement does not purport to be a complete statement
of the parties’ rights and obligations under the Credit Agreement and the transactions contemplated
by the Credit Agreement.