Par Pacific Announces Amendment to ABL Credit Facility and Credit Rating Upgrade by Moody’s Investors Service

Rhea-AI Summary

Par Pacific Holdings, Inc. (PARR) expands its asset-based revolving credit facility to $1.4 billion through an amendment, enhancing its financial flexibility and liquidity.

Financial Analyst

The expansion of Par Pacific's asset-based revolving credit facility from $900 million to $1.4 billion represents a substantial increase in borrowing capacity, which could signify the company's growth strategy or a need for greater liquidity. One must consider the potential reasons behind this move, such as financing acquisitions, capital expenditures, or refinancing existing debt. The impact on the company's leverage ratio and interest coverage metrics will be closely watched by investors, as these are key indicators of financial health in the energy sector.

It's also worth noting that the amendment is contingent on the termination of the existing intermediation agreement. This termination could suggest a strategic shift in the company's business operations or a simplification of its financial structure. The implications of this change should be evaluated in terms of cost savings, operational efficiency and potential impact on revenue streams.

Market Research Analyst

Given the competitive nature of the energy industry, Par Pacific's decision to increase its ABL facility could be a strategic move to capitalize on market opportunities or to cushion against volatile commodity prices. Analysts and investors might be interested in how this increased financial flexibility positions Par Pacific relative to its peers. The ability to quickly mobilize funds can be a competitive advantage in an industry where timing and capital investment can dictate market share gains or losses.

Furthermore, the termination of the intermediation agreement could indicate a shift in risk management strategies or counterparty relationships. This change may affect the company's operational risk profile and should be monitored for any potential changes in the company's risk exposure.

Energy Sector Analyst

The energy sector is capital-intensive and companies like Par Pacific often require substantial financial resources to manage their operations and invest in infrastructure. An increase in the ABL limit may reflect the company's proactive approach to managing the cyclical nature of the industry. The implications for the company's strategic initiatives, such as investments in renewable energy sources or modernization of existing facilities, are areas of interest.

Additionally, the timing of this financial maneuver could be influenced by the current state of the energy market, regulatory changes, or shifts in consumer demand. The potential benefits and drawbacks of such a substantial increase in credit availability must be balanced against the backdrop of a dynamic global energy landscape.

HOUSTON, March 25, 2024 (GLOBE NEWSWIRE) -- Par Pacific Holdings, Inc. (NYSE: PARR) (“Par Pacific”) today announced that, on March 22, 2024, it entered into the previously announced amendment to its asset-based revolving credit facility (“ABL”). The ABL amendment will increase the size of the Company’s ABL from $900 million to $1.4 billion and is conditioned upon the termination of the Company’s existing intermediation agreement, which is expected to occur on or about May 31, 2024. The increase is based, in part, on the addition of certain collateral assets in Hawaii, including refined product inventory and accounts receivable.

In addition, the Company today announced that Moody’s Investors Service has upgraded its corporate family rating to Ba3 from B1.

About Par Pacific
Par Pacific Holdings, Inc. (NYSE: PARR), headquartered in Houston, Texas, is a growing energy company providing both renewable and conventional fuels to the western United States. In the Pacific Northwest and the Rockies, Par Pacific owns and operates 125,000 bpd of combined refining capacity across three locations and an extensive energy infrastructure network, including 7.6 million barrels of storage, and marine, rail, rack, and pipeline assets. In addition, Par Pacific operates the “nomnom” convenience store chain and supplies ExxonMobil-branded fuel retail stations in the region. Par Pacific owns and operates one of the largest energy infrastructure networks in Hawaii with 94,000 bpd of operating refining capacity, a logistics system supplying the major islands of the state and Hele-branded retail locations. Par Pacific also owns 46% of Laramie Energy, LLC, a natural gas production company with operations and assets concentrated in Western Colorado. More information is available at www.parpacific.com.

For more information contact:
Ashimi Patel
VP, Investor Relations and Sustainability
(832) 916-3355
apatel@parpacific.com

What was the previous size of Par Pacific Holdings' asset-based revolving credit facility before the amendment?

The previous size of Par Pacific Holdings' asset-based revolving credit facility was $900 million before the recent amendment.

When did Par Pacific Holdings announce the amendment to its asset-based revolving credit facility?

Par Pacific Holdings announced the amendment to its asset-based revolving credit facility on March 22, 2024.

What is the new size of Par Pacific Holdings' asset-based revolving credit facility after the amendment?

The new size of Par Pacific Holdings' asset-based revolving credit facility after the amendment is $1.4 billion.

What condition is required for the ABL amendment to take effect?

The ABL amendment is conditioned upon the termination of Par Pacific Holdings' existing intermediation agreement.