Summary
MPLX LP (MPLX) has announced the execution of a new $2.0 billion, five-year unsecured revolving credit facility, referred to as the New MPLX Credit Agreement, which became effective on July 7, 2022. This new facility replaces the company's prior $3.5 billion credit agreement and provides enhanced financial flexibility. Investors should note the potential for an additional $1.0 billion increase in commitments and the option for two one-year maturity extensions, subject to lender consent. The agreement includes provisions for swing-line loans and letters of credit, with commitment fees and interest rates tied to MPLX's credit ratings, offering a cost-effective financing option.
Key Highlights
- 1MPLX entered into a new $2.0 billion, five-year unsecured revolving credit facility maturing on July 7, 2027.
- 2The new credit facility replaces the previous $3.5 billion credit agreement.
- 3MPLX has the option to increase the facility's capacity by an additional $1.0 billion, subject to lender approval.
- 4The company can request up to two one-year extensions of the maturity date, with majority lender consent.
- 5Commitment fees range from 10 to 25 basis points, currently at 15 basis points, based on credit ratings.
- 6Interest rates on borrowings are based on Adjusted Term SOFR or Alternate Base Rate, plus a margin dependent on credit ratings.
- 7The agreement includes customary covenants, including a debt-to-EBITDA ratio not to exceed 5.0:1.0 (or 5.5:1.0 during an acquisition period).