Top Story | Capital Markets | Credit Facility Change
E&P Gets $500 in Liquidity; Plans to Continue Executing Dev. Program
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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.
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