Financial Trouble | Capital Markets | Credit Facility Change | Financial Trouble - Going Concern
Denbury Skips Interest Payment; Draws Down Credit Facility by $200MM
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Denbury Resources Inc. has reported two financial developments, according to its most recent SEC filing (dated June 30, 2020).
Skips Out on Interest Payment
Denbury will not be making its $8 million interest payment on its 6⅜% Convertible Senior Notes due 2024.
Subsequently, it has entered a 30-day grace period to make the payment.
Empties Credit Facility as Borrowing Base is Cut
On June 26, 2020, Denbury reported developments relating to its borrowing base by its lender (JPMorgan Chase).
Given the changes (outlined below), the company has elected to draw $200 million from its credit facility to provide increased liquidity and preserve financial flexibility.
As of June 30, 2020, the Company has $265 million of outstanding borrowings under the Credit Agreement and approximately $95 million of outstanding letters of credit under the Credit Agreement.
Changes include:- Borrowing base reaffirmed at $615 million
- A reduction in the maximum availability under the Credit Agreement to the sum of $275 million plus the total amount of outstanding letters of credit
- Added dollar limits, on a temporary basis until the fall 2020 borrowing base redetermination
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