FERRELLGAS PARTNERS: Signs Forbearance Agreement with Noteholders

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Ferrellgas Partners, L.P. has entered into a forbearance agreement with certain holders of its 8.625% Senior Notes due June 15, 2020 holding approximately 77% of the outstanding amount of such notes. Pursuant to the agreement, the Forbearing Holders of the 2020 Notes agreed to forbear from exercising any rights or remedies during the forbearance period against FGP arising from FGP’s failure to pay amounts due and owing under the applicable indenture. The Forbearing Holders also agreed to direct U.S. Bank National Association, as indenture trustee, not to take any remedial action during the term of the forbearance agreement. During the forbearance period, FGP and the Forbearing Holders agreed to work cooperatively to negotiate a definitive restructuring agreement with respect to the 2020 Notes. The forbearance period extends through July 31, 2020, subject to FGP’s satisfaction of certain milestones. FGP is represented by Squire Patton Boggs (US) LLP and the Forbearing Holders are represented by Davis Polk & Wardwell LLP.

About Ferrellgas

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico.

Ferrellgas reported net loss of $64.54 million for the year ended July 31, 2019, a net loss of $256.82 million for the year ended July 31, 2018, and a net loss of $54.50 million for the year ended July 31, 2017. As of April 30, 2020, the Company had $1.72 billion in total assets, $602.81 million in total current liabilities, $2.15 billion in long-term debt, $76.13 million in operating lease liabilities, $52.17 million in other liabilities, and a total partners’ deficit of $1.15 billion.

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As reported by the TCR on Oct. 22, 2019, S&P Global Ratings lowered its issuer credit rating on Ferrellgas Partners L.P. to ‘CCC-’ from ‘CCC’. The downgrade was based on S&P’s assessment that Ferrellgas’ capital structure is unsustainable given the upcoming maturity of its $357 million notes due June 2020.

As reported by the TCR on March 18, 2020, Moody’s Investors Service downgraded Ferrellgas Partners L.P.’s Corporate Family Rating to Caa3 from Caa2. “Ferrellgas’s downgrade is driven by the company’s continued high financial leverage and the very high likelihood that the partnership will complete a full debt recapitalization in the near-term,” said Arvinder Saluja, Moody’s vice president.

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