Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Washington Refinery Intermediation Agreement

On February 11, 2021, we and MLC amended the Washington Refinery Intermediation Agreement and extended the term expiry date from June 30, 2021 to March 31, 2022. This amendment also revised certain other terms and conditions, including a revision to the interest rate of MLC receivable advances to be based on another industry standard benchmark rate that will be effective upon LIBOR’s scheduled retirement at the end of 2021. The terms of the new agreement were not materially different from the prior agreement.

Sale-Leaseback Transaction

On February 11, 2021, PHL and Par Property LLC (collectively, the “Sellers”), both our wholly owned subsidiaries, entered into a Purchase Agreement and Escrow Instructions (the “Purchase Agreement”) with MDC Coast HI 1, LLC, a subsidiary of Realty Income Corporation (the “Buyer”), and Fidelity National Title Insurance Company (the “Escrow Agent”), pursuant to which the Sellers and Buyer agreed to consummate a sale-leaseback transaction (the “Sale-Leaseback Transaction”). Under the terms of the Purchase Agreement, the Sellers agreed to sell to the Buyer a total of twenty-two (22) retail convenience store/fuel station properties located in Hawaii (the “Sale-Leaseback Properties”) for an aggregate cash purchase price of $116.1 million.

On February 23, 2021, the Sellers and Buyer closed the Sale-Leaseback Transaction with respect to twenty-one (21) Sale-Leaseback Properties for an aggregate cash purchase price of approximately $109.4 million. We anticipate that during the first quarter there will be a separate closing for one additional property, as provided under the Purchase Agreement.

We used approximately $51.7 million of the net cash proceeds to repay the Retail Property Term Loan and related interest rate swap and the PHL Term Loan which were related to certain of the Sale-Leaseback Properties. We expect to use the remaining net cash proceeds of $54.1 million for general corporate purposes.

Upon the closing of the sale of the Sale-Leaseback Properties, PHL entered into a Master Land and Building Lease Agreement (the “Lease Agreement”) with the Buyer, pursuant to which, among other things, PHL leased the Sale-Leaseback Properties from the Buyer, on a commercial triple-net basis, for 15 years, unless earlier terminated. The initial lease term may be extended for up to four five-year renewal terms in accordance with the terms of the Lease Agreement. Under the terms of the Lease Agreement, PHL is responsible for monthly rent and all expenses related to the leased facilities, including, but not limited to, insurance premiums, taxes, and other expenses, such as utilities.

In connection with PHL’s entry into the Lease Agreement, Par Petroleum, LLC, our wholly owned subsidiary, entered into a guaranty agreement in favor of the Buyer, pursuant to which, among other things, Par Petroleum, LLC guaranteed the payment when due of the monthly rent, and all other additional rent, interest, and charges payable by PHL to the Buyer under the Lease Agreement, and the performance by PHL of all the material terms, conditions, covenants, and agreements of the Lease Agreement.