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WNR » Topics » Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity.These excerpts taken from the WNR 10-K filed Mar 13, 2009. Covenants
and events of default in our debt instruments could limit our
ability to undertake certain types of transactions and adversely
affect our liquidity.
Our revolving credit facility and term loan facility contain
covenants and events of default that may limit our financial
flexibility and ability to undertake certain types of
transactions. For instance, we are subject to negative covenants
that restrict our activities, including restrictions on:
We are also subject to financial covenants that require us to
maintain specified financial ratios and to satisfy other
financial tests, including a new minimum EBITDA covenant,
minimum consolidated interest coverage ratio (as defined
therein), maximum consolidated leverage ratio (as defined
therein) and maximum consolidated senior leverage ratio (as
defined therein). Our ability to comply with these covenants
will depend upon our ability to generate results similar to
those in prior periods, which will depend on factors outside our
control, including crack spreads, which worsened in 2008 (as
compared to 2007). We cannot assure you that we will satisfy
these covenants. If we fail to satisfy the covenants set forth
in these facilities or an event of default occurs under these
facilities, the maturity of the loans could be accelerated or we
could be prohibited from borrowing for our working capital needs
and issuing letters of credit. If the loans are accelerated and
we do not have sufficient cash on hand to pay all amounts due,
we could be required to sell assets, to refinance all or a
portion of our indebtedness, or to obtain additional financing
through equity or debt financings. Refinancing may not be
possible and additional financing may not be available on
commercially acceptable terms, or at all. If we cannot borrow or
issue letters of credit under the revolving credit facility or
2008 L/C Credit Agreement, we would need to seek additional
financing, if available, or curtail our operations.
The
dangers inherent in our operations could cause disruptions and
could expose us to potentially significant losses, costs or
liabilities. Any significant interruptions in the operations of
any of our refineries could materially and adversely affect our
business, financial condition and operating
results.
Our operations are subject to significant hazards and risks
inherent in refining operations and in transporting and storing
crude oil, intermediate products, and refined products. These
hazards and risks include, but are not limited to, the following:
Table of Contents
Any of the foregoing could result in production and distribution
difficulties and disruptions, environmental pollution, personal
injury or wrongful death claims, and other damage to our
properties and the properties of others. There is also risk of
mechanical failure and equipment shutdowns both in general and
following unforeseen events. Furthermore, in such situations,
undamaged refinery processing units may be dependent on or
interact with damaged process units and, accordingly, are also
subject to being shut down.
Our refineries consist of many processing units, several of
which have been in operation for a long time. One or more of the
units may require unscheduled downtime for unanticipated
maintenance or repairs, or our planned turnarounds may last
longer than anticipated. Scheduled and unscheduled maintenance
could reduce our revenues and increase our costs during the
period of time that our units are not operating.
Our refining activities are conducted at our El Paso
refinery in Texas, the Yorktown refinery in Virginia, and our
two refineries in New Mexico. The refineries constitute a
significant portion of our operating assets, and our refineries
supply a significant portion of our fuel to our retail
operations. Prior to our acquisition of Giant in 2007, there was
one fire incident at the Yorktown refinery and two fire
incidents at the Gallup refinery in late 2006. Because of the
significance to us of our refining operations, the occurrence of
any of the events described above could significantly disrupt
our production and distribution of refined products, and any
sustained disruption could have a material adverse effect on our
business, financial condition and results of operations.
Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity. Our revolving credit facility and term loan facility contain covenants and events of default that may limit our financial flexibility and ability to undertake certain types of transactions. For instance, we are subject to negative covenants that restrict our activities, including restrictions on:
We are also subject to financial covenants that require us to maintain specified financial ratios and to satisfy other financial tests, including a new minimum EBITDA covenant, minimum consolidated interest coverage ratio (as defined therein), maximum consolidated leverage ratio (as defined therein) and maximum consolidated senior leverage ratio (as defined therein). Our ability to comply with these covenants will depend upon our ability to generate results similar to those in prior periods, which will depend on factors outside our control, including crack spreads, which worsened in 2008 (as compared to 2007). We cannot assure you that we will satisfy these covenants. If we fail to satisfy the covenants set forth in these facilities or an event of default occurs under these facilities, the maturity of the loans could be accelerated or we could be prohibited from borrowing for our working capital needs and issuing letters of credit. If the loans are accelerated and we do not have sufficient cash on hand to pay all amounts due, we could be required to sell assets, to refinance all or a portion of our indebtedness, or to obtain additional financing through equity or debt financings. Refinancing may not be possible and additional financing may not be available on commercially acceptable terms, or at all. If we cannot borrow or issue letters of credit under the revolving credit facility or 2008 L/C Credit Agreement, we would need to seek additional financing, if available, or curtail our operations. The dangers inherent in our operations could cause disruptions and could expose us to potentially significant losses, costs or liabilities. Any significant interruptions in the operations of any of our refineries could materially and adversely affect our business, financial condition and operating results. Our operations are subject to significant hazards and risks inherent in refining operations and in transporting and storing crude oil, intermediate products, and refined products. These hazards and risks include, but are not limited to, the following:
Table of Contents
Any of the foregoing could result in production and distribution difficulties and disruptions, environmental pollution, personal injury or wrongful death claims, and other damage to our properties and the properties of others. There is also risk of mechanical failure and equipment shutdowns both in general and following unforeseen events. Furthermore, in such situations, undamaged refinery processing units may be dependent on or interact with damaged process units and, accordingly, are also subject to being shut down. Our refineries consist of many processing units, several of which have been in operation for a long time. One or more of the units may require unscheduled downtime for unanticipated maintenance or repairs, or our planned turnarounds may last longer than anticipated. Scheduled and unscheduled maintenance could reduce our revenues and increase our costs during the period of time that our units are not operating. Our refining activities are conducted at our El Paso refinery in Texas, the Yorktown refinery in Virginia, and our two refineries in New Mexico. The refineries constitute a significant portion of our operating assets, and our refineries supply a significant portion of our fuel to our retail operations. Prior to our acquisition of Giant in 2007, there was one fire incident at the Yorktown refinery and two fire incidents at the Gallup refinery in late 2006. Because of the significance to us of our refining operations, the occurrence of any of the events described above could significantly disrupt our production and distribution of refined products, and any sustained disruption could have a material adverse effect on our business, financial condition and results of operations. These excerpts taken from the WNR 10-K filed Feb 29, 2008. Covenants
and events of default in our debt instruments could limit our
ability to undertake certain types of transactions and adversely
affect our liquidity.
Our revolving credit facility and term loan facility contain
covenants and events of default that may limit our financial
flexibility and ability to undertake certain types of
transactions. For instance, we are subject to negative covenants
that restrict our activities, including restrictions on:
We are also subject to financial covenants that require us to
maintain specified financial ratios and to satisfy other
financial tests. If we fail to satisfy the covenants set forth
in either facility or another event of default occurs under
either facility, the maturity of the loans could be accelerated
or we could be prohibited from borrowing for our working capital
needs and issuing letters of credit. If the loans are
accelerated and we do not have sufficient cash on hand to pay
all amounts due, we could be required to sell assets, to
refinance all or a portion of our indebtedness, or to obtain
additional financing. Refinancing may not be possible and
additional financing may not be available on commercially
acceptable terms, or at all. If we cannot borrow or issue
letters of credit under the revolving credit facility, we would
need to seek additional financing, if available, or curtail our
operations.
Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity. Our revolving credit facility and term loan facility contain covenants and events of default that may limit our financial flexibility and ability to undertake certain types of transactions. For instance, we are subject to negative covenants that restrict our activities, including restrictions on:
We are also subject to financial covenants that require us to maintain specified financial ratios and to satisfy other financial tests. If we fail to satisfy the covenants set forth in either facility or another event of default occurs under either facility, the maturity of the loans could be accelerated or we could be prohibited from borrowing for our working capital needs and issuing letters of credit. If the loans are accelerated and we do not have sufficient cash on hand to pay all amounts due, we could be required to sell assets, to refinance all or a portion of our indebtedness, or to obtain additional financing. Refinancing may not be possible and additional financing may not be available on commercially acceptable terms, or at all. If we cannot borrow or issue letters of credit under the revolving credit facility, we would need to seek additional financing, if available, or curtail our operations. This excerpt taken from the WNR 10-K filed Mar 8, 2007. Covenants
and events of default in our debt instruments could limit our
ability to undertake certain types of transactions and adversely
affect our liquidity.
Our revolving credit facility contains negative and financial
covenants and events of default that may limit our financial
flexibility and ability to undertake certain types of
transactions. For instance, we are subject to negative covenants
that restrict our activities, including restrictions on:
Table of Contents
We are also subject to financial covenants that require us to
maintain specified financial ratios and to satisfy other
financial tests. If we fail to satisfy the covenants set forth
in our revolving credit facility or another event of default
occurs under this facility, the maturity of the loans could be
accelerated or we could be prohibited from borrowing for our
working capital needs and issuing letters of credit. If the
loans are accelerated and we do not have sufficient cash on hand
to pay all amounts due, we could be required to sell assets, to
refinance all or a portion of our indebtedness or to obtain
additional financing. Refinancing may not be possible and
additional financing may not be available on commercially
acceptable terms, or at all. If we cannot borrow or issue
letters of credit under the revolving credit facility, we would
need to seek additional financing, if available, or curtail our
operations.
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