Finance & Investing | Fundraising | Capital Markets

American Eagle Enters into Forbearance Agreement

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American Eagle Energy Corporation announces that on April 2, 2015, the following events occurred in respect of the Notes that the Company sold in August 2014:

• The Company entered into a Forbearance Agreement with four holders (the Ad Hoc Group), who collectively own or manage in excess of 50% (face amount) of the August Notes;
• The Company tendered the sum of $4.0 million as a partial interest payment to U.S. Bank National Association, as trustee under an Indenture, dated as of August 27, 2014, pursuant to which, among other things, the Company issued the August Notes to the holders thereof, some of whom are members of the Ad Hoc Group, which partial interest payment left the Company in default as to approximately $5.8 million of unpaid interest as of April 1, 2015, as well as certain other fees, expenses and other amounts that are chargeable or otherwise reimbursable under the Indenture and the other related documents;
• The Company received a letter from SunTrust Bank, as control agent, in respect of an August 27, 2015, Intercreditor Agreement among SunTrust Bank, as First Lien Collateral Agent, U.S. Bank National Association, as the Second Lien Collateral Agent, and the Company, in which SunTrust Bank provided notice of its resignation as control agent under that Intercreditor Agreement, which resignation is to become effective on May 1, 2015, unless SunTrust Bank is replaced in that role earlier; and
• The Company received a letter from SunTrust Bank, as administrative agent, in respect of a Credit Agreement that the Company entered contemporaneously with the Intercreditor Agreement, in which SunTrust Bank gave the Company notice of an Event of Default thereunder -- specifically, the Company's failure to have paid the above-referenced interest payment in full, rather than in part.