Summary
Phillips 66 (PSX) announced on June 23, 2022, the execution of a new $5 billion revolving credit agreement, effective June 22, 2027. This new facility replaces and terminates a previous $5 billion credit agreement from 2019, along with a separate $750 million credit agreement involving Phillips 66 Partners LP. The company's wholly-owned subsidiary, Phillips 66 Company, is the borrower under the new agreement, with Phillips 66 acting as the guarantor. This refinancing enhances the company's liquidity and financial flexibility. Key terms include a covenant limiting consolidated net debt-to-capitalization to 65%, customary events of default, and the ability for the company to prepay borrowings without penalty. The agreement also provides options to increase the facility size by up to $1 billion and extend its maturity, offering further adaptability to market conditions and strategic needs. Interest rates are tied to market benchmarks like Adjusted Term SOFR or the reference rate, plus applicable margins determined by the company's debt ratings.
Key Highlights
- 1New $5 billion revolving credit facility entered into on June 23, 2022.
- 2Facility has a maturity date of June 22, 2027.
- 3Replaces and terminates prior credit agreements totaling $5.75 billion.
- 4Phillips 66 Company is the borrower, with Phillips 66 as guarantor.
- 5Includes a maximum consolidated net debt-to-capitalization ratio covenant of 65%.
- 6Option to increase facility capacity by up to $1 billion to $6 billion.
- 7Option to extend the maturity date for up to two additional one-year terms.