Top Story | Capital Markets | Credit Facility Change

E&P Gets $500 in Liquidity; Plans to Continue Executing Dev. Program

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   |    Monday,June 08,2020

QEP Resources, Inc. has entered into an amendment to its existing credit agreement with Wells Fargo Bank, National Association, and other lenders.

The amendments increase the company's liquidity by over $500 million.

CEO Tim Cutt said: "The amended credit facility increases our liquidity by more than $500 million and is expected to provide us with the necessary financial flexibility to execute our ongoing business plan."

QEP Drilling / Rigs

The company plans to spend around $570 million in 2020 and this liquidity will likely spur the company to increase D&C operations again.

Full details of the amendment include:

• a change to the leverage ratio covenant to permit a maximum ratio of net priority guaranteed debt to consolidated EBITDAX of 2.50 to 1.00 as of the last day of each fiscal quarter of the Company

• a change of the present value debt ratio covenant to require a minimum present value to net priority guaranteed debt ratio of at least 1.50 to 1.00 at all times

• the ability to repurchase outstanding senior notes with up to $500 million of loan proceeds and certain other amounts

• the ability to issue subsidiary guarantees of up to $500 million of unsecured debt, with such guarantees being subordinated to the obligations under the Credit Agreement

• a reduction in aggregate commitments from $1.25 billion to $850 million

• the requirement that the Company’s material subsidiaries guarantee the obligations under the Credit Agreement and certain swap obligations and bank product obligations

• the revision of the applicable rate for all borrowings under the Credit Agreement to be based on the utilization under the Credit Agreement rather than the Company’s leverage ratio

• amendments of certain of the negative covenants and other provisions of the Credit Agreement, as more specifically set forth in the amendment.