ONEOK Announces New $3.5 Billion Credit Agreement

ONEOK Inc., a prominent player in the energy sector, has disclosed a new sizeable credit agreement. The company made this announcement on February 14, 2025, upon entering into a second amended and restated credit agreement (the “New Credit Agreement”) with Citibank, N.A. and other lenders.

The new agreement does not radically deviate from the existing revolving credit agreement, except for modifications that expand the revolving unsecured credit facility from $2.5 billion to $3.5 billion and push forward the maturity date from June 2028 to February 2030.

The $3.5 billion loan facility includes a $100 million letter of credit subfacility and a $200 million swing line subfacility. The lending institutions have extended the credit facilities to ONEOK on terms that the interest on the revolving loans is contingent on the Term SOFR rate or the alternative base rate, whichever the company prefers, plus a ratings-based margin.

The New Credit Agreement provides ONEOK with an opportunity to request an increase in the commitments by up to an additional $1.0 billion upon satisfaction of conventional conditions. This capacity expansion would hinge upon either securing commitments from new lenders or getting increased commitments from existing lenders.

The inflow from this agreement will enhance ONEOK’s liquidity, supporting expenditures related to working capital, capital expenditures, acquisitions, mergers, and issuance of letters of credit, among other general corporate purposes.

The new agreement comes with certain conditions and covenants that ONEOK considers usual for such facilities. As per one such covenant, ONEOK must maintain a net leverage ratio not exceeding 5.00:1.00, stepping up to 5.50:1.00 for the two fiscal quarters following the consummation of an acquisition with a purchase price in excess of $25 million.

The credit agreement also makes provisions for ONEOK to extend the maturity date by one year up to two times, subject to lenders’ consent. The enforcement of the agreement will span five years after its closing date.

ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership, Magellan Midstream Partners, L.P., EnLink Midstream Partners, LP, and Elk Merger Sub II, L.L.C., have all entered a second amended and restated guaranty agreement, making them jointly and severally liable for ONEOK’s obligations under the New Credit Agreement. Each of these Guarantors is a wholly owned subsidiary of ONEOK.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read ONEOK’s 8K filing here.

ONEOK Company Profile

ONEOK, Inc engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude.