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Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
72
NOTE 11: Debt
HollyFrontier Credit Agreement
On July 1, 2014, we entered into a new $1 billion senior unsecured revolving credit facility maturing in July 2019 (the “HollyFrontier
Credit Agreement”) and contemporaneously terminated our previous $1 billion senior secured revolving credit agreement. The
HollyFrontier Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to
fund general corporate purposes. Indebtedness under the HollyFrontier Credit Agreement is recourse to HollyFrontier and
guaranteed by certain of our wholly-owned subsidiaries. At December 31, 2014, we were in compliance with all covenants, had
no outstanding borrowings and had outstanding letters of credit totaling $4.7 million under the HollyFrontier Credit Agreement.
HEP Credit Agreement
HEP has a $650 million senior secured revolving credit facility that matures in November 2018 (the “HEP Credit Agreement”)
and is available to fund capital expenditures, investments, acquisitions, distribution payments and working capital and for general
partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit. At December 31, 2014, HEP was
in compliance with all of its covenants, had outstanding borrowings of $571.0 million and no outstanding letters of credit under
the HEP Credit Agreement.
Indebtedness under the HEP Credit Agreement bears interest, at HEP's option, at either a reference rate announced by the
administrative agent plus an applicable margin or at a rate equal to LIBOR plus an applicable margin. In each case, the applicable
margin is based upon the ratio of HEP’s funded debt to earnings before interest, taxes, depreciation and amortization (as defined
in the HEP Credit Agreement). The weighted average interest rates in effect on HEP’s Credit Agreement borrowings were 2.152%
and 2.163% at December 31, 2014 and 2013, respectively.
HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets. Indebtedness under the
HEP Credit Agreement involves recourse to HEP Logistics Holdings, L.P., its general partner, and is guaranteed by HEP’s wholly-
owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets,
which other than its investment in HEP, are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our
creditors have no recourse to the assets of HEP and its consolidated subsidiaries.
HollyFrontier Senior Notes
Our 6.875% senior notes ($150 million aggregate principal amount maturing November 2018) (the “HollyFrontier Senior Notes”)
are unsecured and impose certain restrictive covenants, including limitations on our ability to incur additional debt, incur liens,
enter into sale-and-leaseback transactions, pay dividends, enter into mergers, sell assets and enter into certain transactions with
affiliates. Additionally, we have certain redemption rights under the HollyFrontier Senior Notes.
At any time, following notice to the trustee, that the HollyFrontier Senior Notes are rated investment grade by both Moody's and
Standard & Poor's and no default or event of default exists, we are not subject to many of the foregoing covenants (a "Covenant
Suspension"). As of December 31, 2014, the HollyFrontier Senior Notes were rated investment grade by both Standard & Poor's
(BBB-) and Moody's (Baa3). As a result, we are under the Covenant Suspension pursuant to the terms of the indenture governing
the HollyFrontier Senior Notes.
In June 2013, we redeemed our $286.8 million aggregate principal amount of 9.875% senior notes maturing June 2017 at a
redemption cost of $301.0 million, at which time we recognized a $22.1 million early extinguishment loss consisting of a $14.2
million debt redemption premium and an unamortized discount of $7.9 million.
In September 2012, we redeemed our $200 million aggregate principal amount of 8.5% senior notes maturing September 2016 at
a redemption price of $208.5 million.
HollyFrontier Financing Obligation
We have a financing obligation that relates to a sale and lease-back of certain crude oil tankage that we sold to an affiliate of Plains
All American Pipeline, L.P. (“Plains”) in October 2009 for $40.0 million. Monthly lease payments are recorded as a reduction in
principal over the 15-year lease term ending in 2024.