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Debt | 12 Months Ended
--- | ---
Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | Note 11—Debt The following table summarizes our outstanding debt as of December 31, 2016 and 2015 (in thousands):
| December 31,
| 2016 |  | 2015
Hawaii Retail Credit Facilities (1) | $ | 95,319 |  |  | $ | 110,000 |
5% Convertible Senior Notes due 2021 | 115,000 |  |  | — |
Term Loan | 60,361 |  |  | 60,119 |
Par Wyoming Holdings Term Loan | 67,325 |  |  | — |
Wyoming Refining Senior Secured Term Loan | 55,715 |  |  | — |
Wyoming Refining Senior Secured Revolver | 6,700 |  |  | — |
Principal amount of long-term debt | 400,420 |  |  | 170,119 |
Less: unamortized discount and deferred financing costs | (30,024 | ) |  | (4,907 | )
Total debt, net of unamortized discount and deferred financing costs | 370,396 |  |  | 165,212 |
Less: current maturities | (20,286 | ) |  | (11,000 | )
Long-term debt, net of current maturities | $ | 350,110 |  |  | $ | 154,212 |
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(1) | Represents credit agreement with KeyBank (formerly the "Keybank Credit Agreement").
Annual maturities of our long-term debt for the next five years and thereafter are as follows (in thousands):
Year Ended |  | Amount Due
2017 |  | $ | 20,286 |
2018 |  | 124,490 |
2019 |  | 11,000 |
2020 |  | 11,000 |
2021 |  | 193,325 |
Thereafter |  | 40,319 |
Total |  | $ | 400,420 |
Our debt is subject to various affirmative and negative covenants. As of December 31, 2016, we were in compliance with all debt covenants. Some of our subsidiaries have restrictions in their respective credit facilities with regard to dividends, distributions, loans or advances. In certain circumstances, the consent of a third party would be required prior to the transfer of any cash or assets from these subsidiaries to us. Par Wyoming Holdings Credit Agreement On July 14, 2016, in connection with the WRC Acquisition, Par Wyoming Holdings, LLC, our indirect wholly owned subsidiary, entered into the Par Wyoming Holdings Credit Agreement with certain lenders and Chambers Energy Management, LP, as agent, which provides for a single advance secured term loan to our subsidiary in the amount of $65.0 million (the "Par Wyoming Holdings Term Loan") at the closing of the WRC Acquisition. The proceeds of the Par Wyoming Holdings Term Loan were used to pay a portion of the consideration for the WRC Acquisition, to pay certain fees and closing costs and for general corporate purposes. The Par Wyoming Holdings Term Loan matures and is fully payable on July 14, 2021 and may be prepaid, subject to the terms and requirements set forth in the Par Wyoming Holdings Credit Agreement. Interest is payable entirely in cash or, at our election with respect to any fiscal quarter, entirely paid-in-kind ("PIK"), provided that we may not elect to pay interest in the form of PIK for more than twelve fiscal quarters in the aggregate. The Par Wyoming Holdings Term Loan will bear interest at a rate equal to LIBOR plus an applicable interest margin. With respect to cash interest, the applicable interest margin is at a rate per annum equal to 9.5%. With respect to PIK interest, the applicable interest margin is at a rate per annum equal to 13%. Interest is payable in arrears on (a) the last day of each fiscal quarter, (b) the maturity date and (c) the date of any repayment or prepayment of the Par Wyoming Holdings Term Loan. The Par Wyoming Holdings Credit Agreement contains various affirmative and negative covenants affecting the businesses and operations of certain of our subsidiaries, including Wyoming Refining Company and its subsidiaries. In addition, the Par Wyoming Holdings Credit Agreement requires compliance with a leverage ratio covenant calculated quarterly commencing on September 30, 2017. The Par Wyoming Holdings Term Loan is secured by a security interest in substantially all of the assets of Par Wyoming Holdings, LLC, including a pledge of the equity interests of Par Wyoming, LLC, and by a security interest in all of the equity interests in Par Wyoming Holdings, LLC held by Par Petroleum, LLC, a Delaware limited liability company and wholly owned subsidiary of Par. Wyoming Refining Credit Facilities Wyoming Refining Company and its wholly owned subsidiary, Wyoming Pipeline Company LLC, are borrowers (the “Wyoming Refining Credit Facility Borrowers”) under a Third Amended and Restated Loan Agreement dated as of April 30, 2015 (as amended, the “Wyoming Refining Credit Facilities”), with Bank of America, N.A. ("BofA"), as the lender. The Wyoming Refining Credit Facilities remained in place following the consummation of the WRC Acquisition and mature on April 30, 2018. On July 14, 2016, and in connection with the consummation of the WRC Acquisition, the Wyoming Refining Credit Facilities were amended pursuant to a Third Amendment to Third Amended and Restated Loan Agreement (the “Third Loan Amendment”) and a Fourth Amendment to Third Amended and Restated Loan Agreement (the “Fourth Loan Amendment”). Pursuant to the Third Loan Amendment, which was entered into immediately prior to the consummation of the WRC Acquisition, Black Elk Refining, LLC was released from all of its obligations under the Wyoming Refining Credit Facilities and Par Wyoming, LLC joined and became a party to the Wyoming Refining Credit Facilities and the applicable security agreement and guaranteed all obligations of the borrowers under the Wyoming Refining Credit Facilities. The Fourth Loan Amendment was entered into immediately following the consummation of the WRC Acquisition and amended certain covenants in the Wyoming Refining Credit Facilities applicable to Par Wyoming, LLC and the Wyoming Refining Credit Facility Borrowers. The Wyoming Refining Credit Facilities provide for (a) a revolving credit facility in the maximum principal amount at any time outstanding of $30 million ("Wyoming Refining Senior Secured Revolver"), subject to a borrowing base, which provides for revolving loans and for the issuance of letters of credit and (b) certain term loans that are fully advanced ("Wyoming Refining Senior Secured Term Loan"). Once repaid, the Wyoming Refining Senior Secured Term Loan may not be reborrowed. The Wyoming Refining Senior Secured Term Loan bears interest at a rate equal to monthly LIBOR plus 3.0%. Interest is payable in arrears on a monthly basis. The Wyoming Refining Senior Secured Term Loan requires quarterly principal payments of $2.3 million and the remaining unpaid balance is due at maturity. As of December 31, 2016, the letter of credit outstanding related to this agreement was immaterial. The Wyoming Refining Credit Facilities require our subsidiaries and the borrowers under the Wyoming Refining Credit Facilities to comply with various affirmative, negative and financial covenants affecting their respective businesses, including certain financial covenants tested on a monthly basis, beginning July 31, 2016, through December 31, 2016, and quarterly thereafter. Included in these financial covenants are (1) a leverage ratio of not greater than 3.00 to 1.00 calculated on an annualized basis for each month ending on or before December 31, 2016 and on a trailing twelve-month basis for each fiscal quarter thereafter and (2) a fixed charge coverage ratio calculated as of the end of each month ending on or before December 31, 2016 and as of the end of each fiscal quarter thereafter. The fixed charge coverage ratio requires a ratio of at least 1.25 to 1.00. Pursuant to the Third Loan Amendment, we made a deposit of $10 million into a cash collateral account with BofA (the "Cash Collateral") as a security for the Wyoming Refining Credit Facilities. The Cash Collateral was released to Par in November 2016 upon meeting certain financial covenants and other requirements. All loans and letters of credit issued under the Wyoming Refining Credit Facilities are secured by a first-priority security interest and lien on substantially all assets of the Wyoming Refining Credit Facility Borrowers and Par Wyoming, LLC. Bridge Notes On July 14, 2016, we issued approximately $52.6 million in aggregate principal amount of the Bridge Notes in a private offering pursuant to the terms of a note purchase agreement (the “Note Purchase Agreement”) entered into among the purchasers of the Bridge Notes and us. The net proceeds from the sale of the Bridge Notes of $50.0 million were used to fund a portion of the consideration for the WRC Acquisition. Affiliates of EGI, a related party, purchased approximately $36.8 million aggregate principal amount of Bridge Notes. Affiliates of EGI were paid a fee of $1.8 million upon the closing of the Bridge Notes offering for executing the Bridge Notes Commitment Letter. Please read Note 20—Related Party Transactions for further discussion. On September 22, 2016, we completed a registered pro-rata subscription rights offering of approximately 4 million shares of our common stock (the “Rights Offering”). The Rights Offering resulted in gross proceeds, before expenses, of approximately $49.9 million. We used the net proceeds from the Rights Offering to repay all accrued and unpaid interest and a portion of the outstanding principal amount on the Bridge Notes. The remaining $3.1 million aggregate principal amount and $0.3 million unpaid interest of the Bridge Notes was mandatorily converted into 272,733 shares of our common stock based on a conversion price of $12.25 per share. In connection with our repayment of the Bridge Notes, we expensed $3.0 million of financing costs, which are included within Interest expense and financing costs, net on our consolidated statements of operations for the year ended December 31, 2016. 5% Convertible Senior Notes Due 2021 In June 2016, we completed the issuance and sale of an aggregate $115 million principal amount of the 5.00% Convertible Senior Notes in a private placement under Rule 144A (the "Notes Offering"). The Notes Offering included the exercise in full of an option to purchase an additional $15 million in aggregate principal amount of the 5.00% Convertible Senior Notes granted to the initial purchasers. The net proceeds of $111.6 million (net of original issue discount of 3%) from the sale of the 5.00% Convertible Senior Notes were used to finance a portion of the WRC Acquisition, to repay $5 million in principal amount of the Term Loan and for general corporate purposes. The 5.00% Convertible Senior Notes bear interest at a rate of 5.00% per year beginning June 21, 2016 (payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2016) and will mature on June 15, 2021. The initial conversion rate for the notes is 55.5556 shares of common stock per $1,000 principal amount of the 5.00% Convertible Senior Notes (or a total amount of 6,388,894 shares), which is equivalent to an initial conversion price of approximately $18.00 per share of common stock, subject to adjustment upon the occurrence of certain events. Conversions of the 5.00% Convertible Senior Notes will be settled in cash, shares of common stock or a combination thereof at our election. The holders of the 5.00% Convertible Senior Notes may exercise their conversion rights at any time prior to the close of business on the business day immediately preceding the maturity date under certain circumstances. The 5.00% Convertible Senior Notes are not redeemable by us prior to June 20, 2019. On or after June 20, 2019, we may redeem all or any portion of the 5.00% Convertible Senior Notes if the last reported sales price of our common stock is at least 140% of the conversion price then in effect (i) on the trading day immediately preceding the date on which we provide notice of redemption and (ii) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 5.00% Convertible Senior Notes to be redeemed, plus accrued and unpaid interest and a make-whole premium, which is equal to the present value of the remaining scheduled payments of interest on the 5.00% Convertible Senior Notes to be redeemed from the relevant redemption date to the maturity date of June 15, 2021. We have determined that the redemption option and the related make-whole premium represent an embedded derivative that is not clearly and closely related to the 5.00% Convertible Senior Notes. Please read Note 12—Derivatives for further information on embedded derivatives. We separately account for the liability and equity components of the 5.00% Convertible Senior Notes. The fair value of the liability component was calculated using a discount rate of an identical debt instrument without a conversion feature. Based on this borrowing rate, the fair value of the liability component of the 5.00% Convertible Senior Notes on the issuance date was $89.3 million. The carrying amount of the equity component was determined to be $22.2 million by deducting the fair value of the liability component from the $111.6 million net proceeds of the 5.00% Convertible Senior Notes. The deferred financing costs of $0.6 million related to 5.00% Convertible Senior Notes were allocated on a proportionate basis between Long-term debt and Additional paid-in capital on the consolidated balance sheet. As of December 31, 2016, the if-converted value did not exceed the outstanding principal amount of the 5.00% Convertible Senior Notes. As of December 31, 2016, the outstanding principal amount of the 5.00% Convertible Senior Notes was $115.0 million, the unamortized discount and deferred financing cost was $24.0 million and the carrying amount of the liability component was $91.0 million. The unamortized discount and deferred financing costs will be amortized to Interest expense and financing costs, net over the term of the 5.00% Convertible Senior Notes. Hawaii Retail Credit Facilities On December 17, 2015, we entered into the Hawaii Retail Credit Facilities in the form of a revolving credit facility up to $5 million ("Hawaii Retail Revolving Credit Facilities") that provides for revolving loans and for the issuance of letters of credit and term loans (“Hawaii Retail Term Loans”) in the aggregate principal amount of $110 million. The proceeds of the Hawaii Retail Term Loans were used to repay in full existing indebtedness under the Retail Credit Agreement and Mid Pac Credit Agreement, to pay transaction fees and expenses and to repay a portion of existing indebtedness under the Term Loan and Bridge Loan Credit Agreement and to facilitate a cash distribution to Par. As of December 31, 2016, we have not made any borrowings under the Hawaii Retail Revolving Credit Facilities. Hawaii Retail Term Loans principal payments of $2.75 million are made on the last business day of each fiscal quarter beginning with the quarter ending March 31, 2016. All remaining outstanding amounts are fully payable on December 17, 2022. The Hawaii Retail Revolving Credit Facilities mature on December 17, 2020 and no more than seven borrowings of Eurodollar loans may be outstanding at any time. Letters of credit issued under the Hawaii Retail Revolving Credit Facilities are not to expire later than 30 days prior to the maturity date of the Hawaii Retail Revolving Credit Facilities. The Hawaii Retail Term Loans and advances under the Hawaii Retail Revolving Credit Facilities bear interest at a fluctuating rate (i) during the periods such revolving loan or term loan, as applicable, equal to a Base Rate Loan, the Base Rate plus the Applicable Margin (as specified below) and (ii) during the periods such revolving loan or term loan, as applicable, equal to a Eurodollar Loan, the relevant Adjusted Eurodollar Rate for such Eurodollar Loan for the applicable interest period plus the Applicable Margin (as specified below). The effective interest rate for 2016 on the outstanding loan was 3.757%. The applicable margins for the Hawaii Retail Term Loans and advances under the Hawaii Retail Revolving Credit Facilities are as specified below:
|  |  |  | Applicable Margin for |  | Applicable Margin for
Level |  | Leverage Ratio |  | Base Rate Loans |  | Eurodollar Loans
1 |  | < 3.00x |  | 1.50% |  | 2.50%
2 |  | 3.00x - 3.50x |  | 1.75% |  | 2.75%
3 |  | 3.50x - 4.00x |  | 2.00% |  | 3.00%
4 |  | > 4.00x |  | 2.25% |  | 3.25%
We agreed to pay certain fees in connection with the Hawaii Retail Credit Facilities, including usage fees for letters of credit and commitment fees for the unused revolver commitment under the Hawaii Retail Revolving Credit Facilities. Pursuant to the Hawaii Retail Credit Facilities, we are required to comply with various affirmative and negative covenants affecting our business and operations, including compliance with an interest coverage ratio of less than 2.50 to 1.00, a debt service coverage ratio of less than 1.25 to 1.00 and a maximum leverage ratio, calculated on a trailing four-quarters basis, determined as follows:
Period (fiscal quarters) |  | Maximum Leverage Ratio
December 31, 2015 — December 31, 2017 |  | 4.50 to 1.00
March 31, 2018 — December 31, 2018 |  | 4.25 to 1.00
March 31, 2019 and each fiscal quarter-end thereafter |  | 4.00 to 1.00
The loans and letters of credit issued under the Hawaii Retail Credit Facilities are secured by a security interest in and lien on substantially all of the assets of HIE Retail and Mid Pac, a pledge by Par Petroleum, LLC of 100% of its ownership interest in HIE Retail and a pledge by Par Hawaii Inc. of 100% of its ownership interest in Mid Pac. Term Loan On July 11, 2014, we and certain subsidiaries entered into a Delayed Draw Term Loan and Bridge Loan Credit Agreement ("Credit Agreement"), amending and restating a previous borrowing arrangement with the lenders, to provide us with a term loan of up to $50.0 million ("Term Loan") and a bridge loan of up to $75.0 million ("Bridge Loan"). The lenders under the Credit Agreement include ZCOF Par Petroleum Holdings, LLC and Highbridge International, LLC, who are also our stockholders. Proceeds from the Term Loan were used to fund a deposit per the Mid Pac merger agreement, to pay transaction costs and for working capital and general corporate purposes. On July 28, 2014, the Credit Agreement was amended and we borrowed an additional $35.0 million ("Advance") under the Term Loan and on September 10, 2014, we extended the repayment date of the Advance to March 31, 2015. We had no borrowings under the Bridge Loan and on September 3, 2014, we terminated the Bridge Loan and expensed approximately $1.8 million of financing costs associated with this loan that is included in Loss on termination of financing agreements in our consolidated statement of operations for the year ended December 31, 2015. On March 11, 2015, we entered into a Third Amendment to the Credit Agreement whereby we extended the repayment date of the Advance to March 31, 2016. Upon the execution of the Hawaii Retail Credit Agreement on December 17, 2015, we repaid the full amount outstanding under the Advance on December 22, 2015. On June 15, 2016, the Delayed Draw Term Loan and Bridge Loan Credit Agreement was amended to permit (i) the issuance of the 5.00% Convertible Senior Notes, (ii) the issuance of our Bridge Notes and (iii) the WRC Acquisition. We paid a consent fee of $2.5 million in connection with this amendment, $1.3 million of which was paid to an affiliate of Whitebox Advisors, LLC ("Whitebox"), one of our largest stockholders. On June 21, 2016, we repaid $5 million of the Term Loan pursuant to the terms of the amendment, $3.3 million of which was allocated to an affiliate of Whitebox. Please read Note 20—Related Party Transactions for additional information. The Term Loan matures on July 11, 2018 and bears interest at either 10% per annum if paid in cash or 12% per annum if paid in kind, at our election, and has an original issue discount of 5%. The Term Loan is secured by a lien on substantially all of our assets and our subsidiaries, excluding Texadian Energy Inc. ("TEI"), Texadian Energy Canada Limited (“Texadian Canada”), certain of our immaterial subsidiaries and Par Petroleum, LLC and its subsidiaries (collectively “the Guarantors”). All our obligations under the Term Loan are unconditionally guaranteed by the Guarantors. ABL Facility On September 25, 2013, in connection with the acquisition of PHR, we entered into an asset-based senior secured revolving credit facility (“ABL Facility”) of up to $125 million, of which up to $50 million was available for issuances of letters of credit. The ABL Facility was secured by a lien on substantially all of PHR's assets. We borrowed $15 million on September 25, 2013 under the ABL Facility to fund the acquisition of PHR. Upon the execution of the Supply and Offtake Agreements in June 2015 (see Note 10—Inventory Financing Agreements), we repaid in full and terminated the ABL Facility and recognized $1.8 million of financing costs associated with the termination of the agreement, which is included within Loss on termination of financing agreements on our consolidated statements of operations for the year ended December 31, 2015. HIE Retail Credit Agreement On November 14, 2013, HIE Retail entered into a Credit Agreement (“Retail Credit Agreement”) in the form of a senior secured loan of up to $30.0 million and a senior secured revolving line of credit of up to $5.0 million. On May 15, 2015, HIE Retail entered into an amendment to the Retail Credit Agreement that terminated the retail revolver, extended the maturity date of $22.1 million of the existing term loan until March 31, 2022, and provided additional term loan borrowings of up to $7.9 million, on the same terms as the then existing term loan. We repaid in full and terminated the Retail Credit Agreement in December 2015 upon entering into the Hawaii Retail Credit Facilities and expensed $58 thousand of financing costs associated with the Retail Credit Agreement. Texadian Uncommitted Credit Agreement On June 12, 2013, Texadian Energy, Inc. ("TEI") and its wholly owned subsidiary Texadian Canada, entered into an Uncommitted Credit Agreement to provide for loans and letters of credit, on an uncommitted and discretionary basis, in an aggregate amount outstanding not to exceed $50.0 million. Loans and letters of credit issued under the Uncommitted Credit Agreement were secured by a security interest in and lien on substantially all of TEI's assets, a pledge by TEI of 65% of its ownership interest in Texadian Canada and a pledge by us of 100% of our ownership interest in TEI. The Uncommitted Credit Agreement required TEI to comply with various covenants, including covenants regarding the minimum net working capital and minimum tangible net worth of TEI. On February 20, 2015, the Uncommitted Credit Agreement was amended and restated, increasing the uncommitted loans and letters of credit capacity to $200.0 million and extending the maturity date. The agreement expired in February 2016. Mid Pac Credit Agreement On April 1, 2015, PHI and Mid Pac entered into the Mid Pac Credit Agreement in the form of a senior secured term loan in the amount of $50.0 million and a senior secured revolving line of credit in the aggregate principal amount of up to $5.0 million. We borrowed the full amount of the loans at the closing. The proceeds of the loans were used to repay certain existing debt of PHI and Mid Pac totaling $45.3 million, pay a portion of the acquisition consideration and for general corporate purposes. We repaid in full and terminated the Mid Pac Credit Agreement upon entering into the Hawaii Retail Credit Facilities and expensed $381 thousand of financing costs associated with the Mid Pac Credit Agreement, which is included within Loss on termination of financing agreements on our consolidated statements of operations for the year ended December 31, 2015. Cross Default Provisions Included within each of our debt agreements are customary cross default provisions that require the repayment of amounts outstanding on demand should an event of default occur and not be cured within the permitted grace period, if any. As of December 31, 2016, we are in compliance with all of our credit agreements. Guarantors In connection with our shelf registration statement on Form S-3, which was filed with the SEC on September 2, 2016 and declared effective on September 16, 2016 (“Registration Statement”), we may sell non-convertible debt securities and other securities in one or more offerings with an aggregate initial offering price of up to $750.0 million. Any non-convertible debt securities issued under the Registration Statement may be fully and unconditionally guaranteed (except for customary release provisions), on a joint and several basis, by some or all of our subsidiaries, other than subsidiaries that are “minor” within the meaning of Rule 3-10 of Regulation S-X (the “Guarantor Subsidiaries”). We have no “independent assets or operations” within the meaning of Rule 3-10 of Regulation S-X and certain of the Guarantor Subsidiaries may be subject to restrictions on their ability to distribute funds to us, whether by cash dividends, loans or advances.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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