Summary
Marathon Petroleum Corporation (MPC) has entered into a new $1.0 billion unsecured 364-day revolving credit facility, maturing in April 2021. This facility, alongside existing credit lines, provides MPC with significant liquidity, with the option to increase commitments by an additional $250.0 million. The new credit agreement contains customary covenants, including a maximum Consolidated Net Debt to Total Capitalization ratio of 65%. A key condition for drawing on this new facility is that MPC must have zero borrowing availability under its existing credit facilities. Furthermore, if MPC's consolidated cash balance exceeds $2.0 billion for five consecutive business days, it must use excess cash to prepay outstanding borrowings under this new facility. This suggests a strategic approach to managing liquidity and potentially reducing debt when cash reserves are robust.
Key Highlights
- 1MPC entered into a new $1.0 billion unsecured 364-day revolving credit facility.
- 2The new facility matures in April 2021 and can be increased by up to $250.0 million.
- 3The agreement includes customary covenants, such as a maximum debt-to-capitalization ratio of 65%.
- 4Borrowings under the new facility are contingent on exhausting availability under existing credit lines.
- 5MPC must prepay borrowings if its consolidated cash balance exceeds $2.0 billion for five consecutive days.
- 6The action indicates a focus on maintaining liquidity while managing debt levels.