PBF Energy 2012 Annual Report Download - page 119

PBF ENERGY INC. AND SUBSIDIARIES
(COMBINED AND CONSOLIDATED WITH PBF ENERGY COMPANY LLC AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT AND BARREL DATA)
8 - DELAWARE ECONOMIC DEVELOPMENT AUTHORITY LOAN
In June 2010, in connection with the Delaware City acquisition, the Delaware Economic Development Authority
(the “Authority”) granted a subsidiary of the Company a $20,000 loan to assist with operating costs and the cost
of restarting the refinery. The loan is represented by a zero interest rate note and the entire unpaid principal
amount is payable in full on March 1, 2017, unless the loan is converted to a grant.
The loan converts to a grant in tranches of up to $4,000 annually over a five year period, starting at the one year
anniversary of the “certified restart date” as defined in the agreement and certified by the Authority. In order for
the loan to be converted to a grant, the Company is required to utilize at least 600,000 man hours of labor in
connection with the reconstruction and restarting of the Delaware City refinery, expend at least $125,000 in
qualified capital expenditures, commence refinery operations, and maintains certain employment levels, all as
defined in the agreement. As of December 31, 2012, the Company believes it has satisfied the conditions for the
first tranche of the loan to convert to a grant pending confirmation by the Authority.
The Company recorded the loan as a long-term liability pending approval from the Authority that it has met the
requirements to convert the loan to a grant.
9 - CREDIT FACILITY AND LONG-TERM DEBT
Senior Secured Notes
On February 9, 2012, PBF Holding completed the offering of $675,500 aggregate principal amount of 8.25%
Senior Secured Notes due 2020. The net proceeds, after deducting the original issue discount, the initial
purchasers’ discounts and commissions, and the fees and expenses of the offering, were used to repay all of the
outstanding indebtedness plus accrued interest owed under the Toledo Promissory Note, the Paulsboro
Promissory Note, and the Term Loan, as well as to reduce the outstanding balance of the Revolving Loan. The
Company’s Executive Chairman of the Board of Directors, and certain of his affiliates and family members, and
certain of the Company’s other executives, purchased $25,500 aggregate principal amount of these Senior
Secured Notes. As of December 31, 2012, the estimated fair value of the Senior Secured Notes was $700,963.
The estimated fair value, categorized as a Level 2 measurement, was calculated based on the present value of
future expected payments utilizing implied current market interest rates based on quoted prices of the Senior
Secured Notes at December 31, 2012.
The Senior Secured Notes are secured on a first-priority basis by substantially all of the present and future assets
of PBF Holding and its subsidiaries (other than assets securing the Revolving Loan). As of December 31, 2012,
payment of the Senior Secured Notes is jointly and severally guaranteed by all of PBF Holding’s subsidiaries.
PBF Holding has optional redemption rights to repurchase all or a portion of the Senior Secured Notes at varying
prices no less than 100% of the principal amounts of the notes plus accrued and unpaid interest. The holders of
the Senior Secured Notes have repurchase options exercisable only upon a change in control, certain asset sale
transactions, or in event of a default as defined in the indenture agreement. In addition, the Senior Secured
Notes contain covenant restrictions limiting certain types of additional debt, equity issuances, and payments.
PBF Holding is in compliance with the covenants as of December 31, 2012.
Revolving Loan
In October 2012, PBF Holding amended and restated its asset based revolving credit agreement (“Revolving
Loan”) to a maximum availability of $1,375,000 and extended the maturity date to October 26, 2017. In addition,
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