UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
November
30
, 2012
Compressco Partners, L.P.
(Exact
name of registrant as specified in its charter)
Delaware
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1-35195
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94-3450907
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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101 Park Avenue, Suite 1200
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Oklahoma City, Oklahoma 73102
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(Address
of Principal Executive Offices and Zip Code)
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Registrant’s telephone number, including area code:
(405) 677-0221
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry Into a Material Definitive Agreement.
On December 4, 2012, Compressco Partners, L.P. (the “Partnership”) and
certain of its subsidiaries entered into a First Amendment to Credit Agreement
(the “Amendment”) with JPMorgan Chase Bank, N.A. The Amendment amends the
Credit Agreement, dated as of June 24, 2011 (the “Credit Agreement”) among the
Partnership, Compressco Partners Operating, LLC and Compressco Partners Sub,
Inc., each a wholly-owned subsidiary of the Partnership, and JPMorgan Chase
Bank, N.A. The primary purpose of the Amendment is to amend the provisions of
the Credit Agreement that required $3,000,000 to be set aside as a reserve that
could not be borrowed by the Partnership. These amendments included the
deletion of the defined term “Availability Block” from the Credit Agreement and
conforming changes in other definitions and provisions of the Credit Agreement.
The amendments result in (i) an increase in the availability under the Credit
Agreement to $20,000,000 from the previous availability of $17,000,000, and
(ii) a reduction of the borrowing base under the Credit Agreement by
$3,000,000.
JPMorgan Chase Bank, N.A., as well as
certain of its affiliates, have performed and may in the future perform for the
Partnership various commercial banking, investment banking, lending,
underwriting and other financial services, for which they have received and may
in the future receive customary fees and expenses.
The foregoing description of the
Amendment does not purport to be complete and is qualified in its entirety by
reference to the full text of the Amendment, a copy of which is attached as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated in this item
1.01 by reference.
Item 2.03 Creation of a Direct
Financial Obligation
On November 30, 2012 the Partnership
drew down a total of $4.25 million on its revolving credit facility under the
Credit Agreement with JPMorgan Chase Bank, N.A. See below for a further
discussion of the Partnership’s revolving credit facility. The Partnership
intends to use the majority of these proceeds to fund its ongoing capital
expenditures related to the expansion of its Latin American and other
international fleet of compressor units and other equipment as a result of increased
demand. The Partnership intends to use the remainder of these proceeds domestically to fund
its ongoing upgrades of compressor units and for the manufacture of additions to its fleet of compressor units. Subsequent to the
borrowing, the Partnership had $10.05 million outstanding under the credit
facility.
As previously disclosed, on June 24,
2011, the Partnership entered into the Credit Agreement establishing a $20.0 million
revolving credit facility agreement with JPMorgan Chase Bank, N.A. The
borrowers under the revolving credit facility are the Partnership, Compressco
Partners Operating, LLC and Compressco Partners Sub, Inc., each a wholly owned
subsidiary of the Partnership. As amended by the Amendment, the revolving
credit facility includes borrowing capacity available for letters of credit (at
a sublimit of $5.0 million) and a $20.0 million uncommitted expansion feature.
Amounts borrowed under the revolving credit facility, including the advance
reported above, are due and payable, together with all unpaid interest, fees
and other obligations, on June 24, 2015, or earlier upon early repayment by the
Partnership or exercise by the lender of its rights under the revolving credit
facility.
The $10.05 million of borrowings
under the revolving credit facility will bear interest at a weighted average
initial rate of 2.5986% per annum. Generally, borrowings under the
Partnership’s revolving credit facility bear interest at a rate per annum equal
to, at the Partnership’s option, either (a) British Bankers Association LIBOR
(adjusted to reflect any required bank reserves) for an interest period equal
to one, two, three or six months (as selected by the Partnership) plus a margin
of 2.25% per annum or (b) a base rate determined by reference to the highest of
(1) the prime rate of interest announced from time to time by JPMorgan Chase
Bank, N.A. or (2) British Bankers Association LIBOR (adjusted to reflect any
required bank reserves) for a one-month interest period on such day plus 2.50%
per annum. In addition to paying interest on outstanding principal under the
Partnership’s revolving credit facility, the Partnership is required to pay a
commitment fee, in respect of the unutilized commitments thereunder, of 0.425%
per annum, paid quarterly in arrears. The Partnership is also required to pay
customary collateral monitoring fees and letter of credit fees, including,
without limitation, a letter of credit fee equal to the applicable margin on
revolving credit LIBOR loans and fronting fees.
The foregoing description of the
Credit Agreement is qualified in its entirety by reference to (i) the full text
of the Credit Agreement, a copy of which was attached as Exhibit 10.1 to the Form
8-K filed with the Securities and Exchange Commission on June 24, 2011, and
incorporated by reference into this Item 2.03, and (ii) the Amendment, a copy
of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated in this item 2.03 by reference.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits.
Exhibit Number
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Description
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10.1
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First Amendment to Credit
Agreement dated as of December 4, 2012,
among Compressco Partners, L.P. as borrowers, and JPMorgan Chase Bank,
National Association
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
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Compressco Partners, L.P.
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By:
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Compressco Partners GP Inc.,
its general partner
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By:
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/s/Ronald J. Foster
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Ronald J. Foster
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President
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Date: December 5, 2012
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EXHIBIT INDEX
Exhibit Number
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Description
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10.1
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First Amendment to Credit
Agreement dated as of December 4, 2012,
among Compressco Partners, L.P. as borrowers, and JPMorgan Chase Bank,
National Association
.
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