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Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
73
HEP Senior Notes
In March 2012, HEP issued $300 million in an aggregate principal amount of 6.5% HEP senior notes maturing March 2020 (the
“HEP Senior Notes”). The $294.8 million in net proceeds were used to repay $157.8 million aggregate principal amount of 6.25%
HEP senior notes, $72.9 million in promissory notes due to HollyFrontier, related fees, expenses and accrued interest in connection
with these transactions and to repay borrowings under the HEP Credit Agreement. In April 2012, HEP called for redemption the
remaining $27.2 million aggregate principal amount outstanding of 6.25% HEP senior notes.
The HEP Senior Notes are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur
additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates,
and enter into mergers. At any time when the HEP Senior Notes are rated investment grade by both Moody’s and Standard &
Poor’s and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP
has certain redemption rights under the HEP Senior Notes.
In March 2014, HEP redeemed its $150.0 million aggregate principal amount of 8.25% senior notes maturing March 2018 at a
redemption cost of $156.2 million, at which time HEP recognized a $7.7 million early extinguishment loss consisting of a $6.2
million debt redemption premium and unamortized discount and financing cost of $1.5 million. HEP funded the redemption with
borrowings under the HEP Credit Agreement.
Indebtedness under the HEP Senior Notes involves recourse to HEP Logistics Holdings, L.P., its general partner, and is guaranteed
by HEP’s wholly-owned subsidiaries. However, 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.
The carrying amounts of long-term debt are as follows:
December 31,
2014 2013
(In thousands)
6.875% Senior Notes
Principal $ 150,000 $ 150,000
Unamortized premium 4,144 5,054
154,144 155,054
Financing Obligation 33,167 34,835
Total HollyFrontier long-term debt 187,311 189,889
HEP Credit Agreement 571,000 363,000
HEP 6.5% Senior Notes
Principal 300,000 300,000
Unamortized discount (3,421) (4,073)
296,579 295,927
HEP 8.25% Senior Notes
Principal — 150,000
Unamortized discount — (1,297)
— 148,703
Total HEP long-term debt 867,579 807,630
Total long-term debt $ 1,054,890 $ 997,519