Heating Oil Partners Income Fund

Heating Oil Partners Income Fund

March 14, 2005 18:35 ET

Heating Oil Partners Income Fund Provides Update on Credit Facilities


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: HEATING OIL PARTNERS INCOME FUND

TSX SYMBOL: HIF.UN

MARCH 14, 2005 - 18:35 ET

Heating Oil Partners Income Fund Provides Update on
Credit Facilities

TORONTO, ONTARIO--(CCNMatthews - March 14, 2005) - (NOT FOR DISTRIBUTION
TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES)

Heating Oil Partners Income Fund (the "Fund") (TSX:HIF.UN) announced
today that the Fund's operating subsidiary, Heating Oil Partners, L.P.
("HOP" or the "Company"), has completed an amendment of its working
capital and term loan facilities (together, the "Credit Facilities")
with its bank lending group. The Company has also entered into an
agreement (the "Additional Agreement") with certain of its lenders,
providing for up to an additional US$15 million of working capital
loans, in addition to working capital amounts available under the Credit
Facilities, through April 22, 2005.

The Company will be required to repay all drawings under the Additional
Agreement, together with accrued and unpaid interest, on April 22, 2005.
The availability of funds under the Additional Agreement will be subject
to a borrowing base test and certain other financial covenants. The
Company and its lenders have also agreed to amend the maturity date of
the Credit Facilities to October 31, 2005. Quarterly amortization
repayments under the term loan of approximately US$3 million are
scheduled for the first day of May, July and October, in addition to the
final repayment on the maturity date. The Additional Agreement, the
Credit Facilities and the Company's outstanding senior notes are
collateralized by substantially all of the Company's assets, and are
guaranteed by the Fund's wholly-owned subsidiary, HOP Holdings, Inc.

The Company is continuing to explore a variety of alternative financing
opportunities to provide a longer-term solution for its seasonal working
capital requirements and other capital structuring objectives. The
willingness of the Company's lenders to amend the Credit Facilities and
extend the Additional Agreement continues to be based on the Company's
commitment to retain all available cash in the business during the
heating season, which requires the suspension of distributions by the
Company and by extension, the Fund. As such, the Credit Facilities
require the consent of the Company's lenders prior to any
re-commencement of cash distributions to the Fund's unitholders.

HOP cautioned that it may require further amendments to the Credit
Facilities and/or the Additional Agreement. There is no assurance that
such further amendments, if required, will be ultimately approved by the
lenders. The failure to obtain such further amendments could have a
material adverse impact on both the Company's and the Fund's financial
condition.

The Fund indirectly owns approximately 88.1% of HOP, one of the largest
residential heating oil distributors in the United States. HOP delivered
over 215 million gallons of heating oil and other refined liquid
petroleum products for the twelve months ended June 30, 2004 to
approximately 150,00 residential and commercial customers, primarily in
Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania
and Rhode Island. HOP's operations are conducted through 11 regional
distribution and service centres. From these centres, HOP provides its
customers with a full range of value-added services, including the
delivery of heating oil and the installation, maintenance and service of
furnaces, boilers, heating equipment and air conditioners on a 24
hours-a-day, 365 days-a-year basis.

This news release contains forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors outside
of Management's control that could cause actual results to differ
materially from those described in the forward-looking statements. The
Fund does not assume responsibility for the accuracy and completeness of
these forward-looking statements and does not undertake the obligation
to publicly revise these forward-looking statements to reflect
subsequent events or circumstances.

Additional information, including the Fund's complete financial
statements for the fiscal year ended September 30, 2004 and the quarter
ended December 31, 2004, can be found at www.sedar.com or on the Fund's
website at www.hif-un.com.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Heating Oil Partners, L.P.
    Paul J. Forrest
    Chief Financial Officer
    (203) 655-8290