Summary
Valero Energy Corporation (VLO) filed an 8-K on March 19, 2019, to announce a material amendment and restatement of its revolving credit agreement. The key change is the extension of the credit facility's maturity date from November 12, 2020, to March 19, 2024. This extension provides the company with greater financial flexibility and a longer-term access to capital. The amended credit facility maintains an aggregate principal amount of up to $4 billion, with a letter of credit subfacility of up to $2.4 billion. Importantly, there is an option to increase the revolving commitments by an additional $1.5 billion, potentially bringing the total facility size to $5.5 billion. This enhancement offers significant liquidity to support Valero's general corporate purposes, including potential debt refinancing.
Key Highlights
- 1Amended and restated revolving credit agreement to extend maturity to March 19, 2024.
- 2Extended maturity date is more than three years longer than the previous November 12, 2020 maturity.
- 3Revolving credit facility has an aggregate principal amount of up to $4 billion.
- 4Option to increase revolving commitments by up to $1.5 billion, potentially reaching $5.5 billion.
- 5Letter of credit subfacility of up to $2.4 billion.
- 6Interest rates are tied to Moody's and S&P ratings, ranging from 0.9% to 1.45% for Eurodollar borrowings and 0% to 0.450% for base rate borrowings.
- 7Proceeds are designated for general corporate purposes, including potential debt refinancing.