Montana Renewables LLC received a $300 million, three-year senior secured convertible term loan as part of a series of transactions related to Calumet Specialty Products Partners LP's renewable diesel business.

Funds managed by Oaktree Capital Management LP provided the debt investment. Interest is 8%. The loan closed Nov. 18.

The loan has covenants requiring the borrower to maintain consolidated EBITDA of $152 million-$167 million over four quarters. Covenants also restrict additional debt and M&A by Montana Renewables, among other things.

The transactions will establish Montana Renewables as an "unrestricted pure-play renewables subsidiary of Calumet," according to a Nov. 19 statement from the companies.

The transaction included a $145 million preferred equity investment in Montana Renewables by Calumet.

The transaction required lender consent and a revolver credit agreement amendment for the sale by Calumet Montana of a hydrocracker in Great Falls, Mont., to Montana Renewables. Bank of America is the agent on the credit agreement. Lenders on the $600 million revolver due February 2023 are Wells Fargo, J.P. Morgan, Regions Bank, BMO Harris Bank, Barclays, U.S. Bank and PNC, the credit agreement showed.

Calumet's operations in Montana include two independent businesses: renewables through Montana Renewables and crude refining through Calumet Montana Refining LLC.

Calumet received net cash proceeds of $199 million from the transactions. As a result, the company has begun to redeem $80 million in 7.625% senior notes due 2022.

"MRL will complete its in-flight capital projects and is expected to become one of the most advantaged renewable diesel producers in North America," the companies said.