8-KMaterial AgreementsFinancial EventsExhibits & Filings

VALERO ENERGY CORP/TX 8-K Report, Material Agreement (Mar 19, 2019)

Filed March 19, 2019For Securities:VLO

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.

Frequently Asked Questions

The main purpose of this filing is to inform investors about the amendment and restatement of Valero's revolving credit agreement, primarily to extend its maturity date and ensure continued access to a significant credit facility for general corporate purposes.

This filing relates to an existing credit facility and its terms. While it provides access to funds, it doesn't directly change existing debt obligations or leverage ratios unless the company draws on the facility. The extension of maturity provides more time to manage its capital structure and potentially refinance other debts.

The ability to increase the revolving commitments by up to $1.5 billion means Valero has the potential to access up to $5.5 billion in total. This increased capacity offers greater financial flexibility to pursue strategic initiatives, manage working capital, or address unexpected needs.

Interest rates are variable and depend on Valero's credit ratings from Moody's and S&P, plus an applicable margin. Commitment fees on unused portions of the credit line also apply. Specific rates are detailed within the filing, ranging from 0.9% to 1.45% for Eurodollar borrowings and 0% to 0.450% for base rate borrowings, with commitment fees between 0.10% and 0.30%.