TransMontaigne Partners Closes Credit Facility Amendment
In a significant financial development, TransMontaigne Partners LLC (“TransMontaigne”) has announced the successful closing of Amendment No. 4 (“Amendment No. 4”) to its existing Credit Agreement. This amendment marks another step in the company’s ongoing efforts to optimize its capital structure and enhance its financial flexibility. The announcement underscores TransMontaigne’s commitment to maintaining a robust financial position while adapting to evolving market conditions.
Background on the Credit Agreement
The original Credit Agreement was executed on November 17, 2021, and has since undergone several amendments to align with the company’s strategic objectives. These amendments include Amendment No. 1, dated June 9, 2023; Amendment No. 2, dated April 15, 2024; and Amendment No. 3, dated October 28, 2024. Each of these amendments has played a role in refining the terms of the credit facility to better suit TransMontaigne’s operational needs.
The Credit Agreement initially established two key components:
- A $150,000,000 senior secured revolving facility , designed to provide liquidity for day-to-day operations and short-term financing requirements.
- A $1,000,000,000 senior secured Tranche B term loan , aimed at supporting long-term investments and growth initiatives.
Under the agreement, TransMontaigne Operating Company L.P. (the “Operating Partnership”) serves as the borrower, while TransMontaigne Partners LLC acts as a guarantor. Barclays Bank PLC plays a dual role as both the administrative agent and collateral agent, overseeing the interests of the lenders and secured parties involved.
Key Provisions of Amendment No. 4
Amendment No. 4 introduces two critical changes to the terms of the revolving facility:
1. Extension of Maturity Date
One of the most notable features of Amendment No. 4 is the extension of the maturity date for the revolving facility. The new maturity date is set to the earlier of:
- August 31, 2029 , or
- If any Tranche B term loans remain outstanding, 91 days prior to the maturity date of those loans (taking into account any extensions or refinancings).
This adjustment provides TransMontaigne with additional time to utilize the revolving facility without the immediate pressure of repayment, thereby enhancing its ability to manage cash flow and execute its business strategy over an extended period.
2. Adjustment of Applicable Margins
Another important aspect of Amendment No. 4 is the repricing of the applicable margins for loans under the revolving facility. Specifically:
- The margin for alternate base rate loans has been reduced from 2.50% to 2.00% .
- The margin for SOFR loans has been lowered from 3.50% to 3.00% .
These reductions translate into cost savings for TransMontaigne, as the lower interest rates decrease the overall borrowing costs associated with the revolving facility. This move reflects the company’s proactive approach to managing expenses and improving its financial efficiency.
Strategic Implications
The completion of Amendment No. 4 represents more than just a technical update to the terms of the credit facility. It demonstrates TransMontaigne’s focus on strengthening its financial foundation and positioning itself for sustained growth. By extending the maturity date and reducing borrowing costs, the company gains greater flexibility to navigate potential challenges and seize opportunities in the dynamic energy logistics sector.
Moreover, the repricing of the revolving facility underscores TransMontaigne’s ability to negotiate favorable terms with its lenders. This achievement highlights the confidence that financial institutions have in the company’s performance and future prospects. It also reinforces the strong relationships TransMontaigne has built with its banking partners, which are crucial for securing access to capital markets.
Legal Counsel and Advisory Support
To ensure the smooth execution of Amendment No. 4, TransMontaigne engaged top-tier legal expertise. Latham & Watkins LLP served as legal counsel to TransMontaigne, providing guidance throughout the negotiation and documentation process. On the other side, Milbank LLP represented the Administrative Agent and the revolving lenders, ensuring that all parties’ interests were adequately addressed.
The involvement of these prestigious law firms underscores the complexity and importance of the transaction. Their expertise helped facilitate a seamless closing, allowing TransMontaigne to implement the amendments efficiently and effectively.
Compliance with Securities Laws
It is important to note that this press release does not constitute an offer to sell or a solicitation of an offer to buy any securities. Furthermore, no sale of securities will occur in any state or jurisdiction where such activity would violate applicable securities laws unless proper registration or qualification has been obtained beforehand. This disclaimer ensures compliance with regulatory requirements and protects both TransMontaigne and potential investors.
With the successful implementation of Amendment No. 4, TransMontaigne is well-positioned to continue delivering value to its stakeholders. The extended maturity date and reduced borrowing costs provide a solid platform for the company to pursue its strategic priorities, including expanding its infrastructure footprint, enhancing operational efficiencies, and driving sustainable growth.
As the energy logistics landscape continues to evolve, TransMontaigne remains committed to innovation and excellence. The company’s ability to adapt its financial arrangements to meet changing market demands is a testament to its resilience and forward-thinking leadership. Investors, customers, and partners can look forward to continued progress as TransMontaigne builds on this latest milestone.
The closing of Amendment No. 4 to the Credit Agreement marks a pivotal moment for TransMontaigne Partners LLC. By extending the maturity date of its revolving facility and lowering borrowing costs, the company has taken meaningful steps to bolster its financial profile and support its long-term objectives. With the backing of experienced legal advisors and the trust of its lenders, TransMontaigne is poised to thrive in an increasingly competitive environment. As the company moves forward, it will undoubtedly leverage this strengthened financial position to drive innovation, deliver exceptional service, and create lasting value for all stakeholders.