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Get filing alertsNGL Energy refinances with $950M term loan, cuts ABL facility to reduce interest costs
Filed March 12, 2026 · Period ending March 12, 2026 · ~1 min read
Key Changes
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Closed new $950M term loan maturing March 2033 with Barclays, using proceeds to pay off existing debt and redeem Class D Preferred Units. Quarterly principal payments of 1% begin June 2026.
Item 1.01: New Term Loan verify on EDGAR → -
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Must maintain debt service coverage ratio of at least 1.10:1.00 starting Q2 2026. Failure to meet this covenant could trigger default and accelerate debt repayment.
Item 1.01: Covenant verify on EDGAR → -
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Amended ABL facility, reducing commitments from $475M to $425M and letter of credit capacity from $200M to $100M, but lowered interest margins to 2.00-2.50% for SOFR loans.
Item 1.01: ABL Amendment verify on EDGAR → -
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New term loan bears interest at SOFR plus 3.25-3.50% (or base rate plus 2.25-2.50%), with margin tied to leverage ratio. Lower rates than previous facility should reduce interest expense.
Item 1.01: Interest Rate verify on EDGAR → -
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Plans to use loan proceeds to redeem portion of Class D Preferred Units, which would reduce preferred dividend obligations but increases overall debt burden.
Item 1.01: Preferred Redemption verify on EDGAR →
Summary
NGL Energy Partners completed a significant debt refinancing on March 12, 2026, replacing an older term loan with a new $950 million facility from Barclays that matures in seven years. The company simultaneously reduced its revolving credit capacity from $475 million to $425 million but secured lower interest rates on both facilities.
The refinancing appears designed to reduce borrowing costs while providing capital to retire some of the company's Class D Preferred Units, which carry dividend obligations. For preferred unitholders, the planned redemption could mean receiving cash back but losing future dividend income.
The new debt structure introduces a quarterly debt service coverage covenant of 1.10:1.00 starting in Q2 2026, which the company must maintain to avoid default. This covenant creates a measurable threshold that investors should monitor each quarter. Watch the company's Q2 2026 earnings release closely to see if it meets the new 1.10:1.00 debt service coverage requirement and whether it follows through on redeeming Class D Preferred Units. The refinancing trades preferred equity for cheaper debt, which could improve cash flow if the company maintains adequate coverage ratios.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
NGL Energy refinanced debt with a new $950M term loan and amended its ABL facility, reducing commitments and interest rates.
Added in current filing · verify on EDGAR →
Amounts borrowed and repaid under the Term Loan will bear interest at a SOFR-based rate (with such customary provisions under the Term Loan providing for the replacement of SOFR with any successor rate) or an alternate base rate, in each case plus an applicable margin. The applicable margin for alternate base rate loans varies from 2.25% to 2.50% and the applicable margin for SOFR-based loans varies from 3.25% to 3.50%, in each case, depending on Partnership’s consolidated first lien net leverage ratio.
The new term loan bears interest at SOFR plus 3.25% to 3.50% (or alternate base rate plus 2.25% to 2.50%), with the margin depending on the Partnership's leverage ratio. This pricing structure will impact the Partnership's interest expense going forward.
Added in current filing · verify on EDGAR →
The Term Loan Credit Agreement requires that Partnership maintain, on a quarterly basis and beginning with the fiscal quarter ending June 30, 2026, a debt service coverage ratio of no less than 1.10:1.00.
The Partnership must maintain a minimum debt service coverage ratio of 1.10:1.00 starting with the quarter ending June 30, 2026. This financial covenant restricts the Partnership's operational flexibility and could trigger default if violated.
Added in current filing · verify on EDGAR →
The ABL Amendment amends the ABL Facility to (i) reduce the aggregate amount of commitments thereunder from $475.0 million to $425.0 million, (ii) reduce both the sub-limit for letters of credit, and the aggregate amount that the commitments thereunder may be increased, from $200.0 million to $100.0 million, (iii) reduce the applicable interest rate margins for loans thereunder to a range of between 2.00% to 2.50% for SOFR-based loans and 1.00% to 1.50% for alternate base rate loans, in each case depending on Partnership’s fixed charge coverage ratio in effect from time to time, (iv) reduce the commitment fees payable thereunder to 0.375% per annum, subject to a further reduction to 0.25% per annum if Partnership’s fixed charge coverage ratio in effect from time to time is greater than or equal to 1.75:1.00 and (v) make certain other changes to the terms thereof.
The Partnership amended its asset-based revolving credit facility, reducing total commitments from $475 million to $425 million and letter of credit capacity from $200 million to $100 million. However, interest rate margins were reduced to 2.00%-2.50% for SOFR loans and commitment fees were lowered to 0.375% (or 0.25% if coverage ratio exceeds 1.75:1.00), which should reduce borrowing costs.
Event · Item 2.03 — Creation of a Direct Financial Obligation
NGL Energy Partners LP created a new direct financial obligation through a new term loan and ABL amendment.
Added in current filing · verify on EDGAR →
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 hereto under the captions “New Term Loan” and “ABL Amendment” is incorporated by reference into this Item 2.03.
The company disclosed the creation of a new direct financial obligation. The 8-K references a new term loan and an amendment to its asset-based lending (ABL) facility, with details incorporated by reference from Item 1.01. However, the specific terms, amounts, and conditions are not provided in the excerpt shown.
Event · Item 7.01 — Regulation FD Disclosure
NGL Energy Partners LP announced the closing of a Term Loan via press release on March 12, 2026.
Added in current filing · verify on EDGAR →
On March 12, 2026, Partnership issued a press release announcing the closing of the Term Loan.
The Partnership disclosed that it closed a Term Loan transaction on March 12, 2026. The 8-K does not provide details about the loan amount, terms, interest rate, maturity, or purpose, as those details are presumably contained in the press release exhibit. This is a Regulation FD disclosure, meaning the information is being publicly released to ensure fair disclosure to all investors simultaneously.
Event · Item 9.01 — Financial Statements and Exhibits
NGL Energy entered a new term loan and amended its existing credit agreement on March 12, 2026.
Added in current filing · verify on EDGAR →
Term Loan Credit Agreement, dated as of March 12, 2026, by and among NGL Energy Operating LLC, NGL Energy Partners LP, Barclays Bank PLC, as administrative agent, collateral agent and a lender, and certain financial institutions party thereto.
NGL Energy Operating LLC and NGL Energy Partners LP entered into a new term loan credit agreement with Barclays Bank PLC serving as administrative agent, collateral agent, and lender, along with other financial institutions. The specific terms, amount, and purpose of this term loan are not disclosed in the 8-K body but would be detailed in the attached exhibit.
Added in current filing · verify on EDGAR →
Seventh Amendment to Credit Agreement, dated as of March 12, 2026, by and among NGL Energy Operating LLC, NGL Energy Partners LP, the guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain financial institutions party thereto.
The company amended its existing credit agreement with JPMorgan Chase Bank, N.A. as administrative agent for the seventh time. This amendment involves NGL Energy Operating LLC, NGL Energy Partners LP, and various guarantors and lenders. The specific modifications to terms, covenants, or borrowing capacity are not disclosed in the 8-K body.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 4, 2026 · How we verify