Delek US enters $800M inventory intermediation with Citigroup, replacing J. Aron agreements

On December 27, 2022, in connection with entry into the Inventory Intermediation Agreement, DKTS, the Refinery Companies and J. Aron & Company LLC (“J. Aron”) agreed to terminate the Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J. Aron and ARKS (the “ARKS S&O Agreement”), the Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J. Aron and Alon (the “Alon S&O Agreement”), and the Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J. Aron and Lion Oil (the “Lion S&O Agreement”, and together with the ARKS S&O Agreement and the Alon S&O Agreement, the “Prior S&O Agreements”), with each such termination to be effective as of December 30, 2022.

On December 22, 2022, DK Trading & Supply, LLC (“DKTS”), an indirect subsidiary of Delek US Holdings, Inc. (the “Company”), acting on behalf of, and jointly and severally liable with, each of (i) Lion Oil Company, LLC (“Lion Oil”), (ii) Alon Refining Krotz Springs, Inc. (“ARKS”) and (iii) Alon USA, LP (“Alon” and together with each of Lion Oil and ARKS, the “Refinery Companies” and each a “Refinery Company”) entered into an inventory intermediation agreement (the “Inventory Intermediation Agreement”) with Citigroup Energy Inc. (“Citi”).

On December 22, 2022, in connection with entry into the Inventory Intermediation Agreement, the Company entered into Amendment No. 1 (the “First Amendment”) to its Third Amended and Restated Credit Agreement (the “ABL Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, the Company, as borrower, certain subsidiaries of the Company, as guarantors, and the other lenders party thereto.

On December 22, 2022, in connection with entry into the Inventory Intermediation Agreement, DKTS and Citi entered into a pledge and security agreement (the “Pledge and Security Agreement”), pursuant to which DKTS agreed to grant to Citi, effective December 30, 2022 subject to certain conditions precedent, (i) in the case any transaction for the sale, assignment, delivery and transfer of ownership of the hydrocarbons pursuant to the Inventory Intermediation Agreement is found not be a true sale, a security interest in certain crude oil, refined petroleum products and other hydrocarbons at certain locations and (ii) a security interest in all business interruption insurance associated with the hydrocarbons sold.