Debt | Financial Trouble | Capital Markets | Credit Facility Change | Private Equity Activity
New Strategy Emerges: Companies Tapping Entire Credit Limit to Survive
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As the industry downturn continues to put pressure on E&Ps, a number of companies are tapping out their entire credit limits to stay afloat.
Most recently, SandRidge Energy Inc. and LINN Energy LLC have adopted this strategy.
On January 25, 2016, SandRidge borrowed $489 million out of its credit facility. This move came shortly after the company's stock was pulled from the NYSE for not maintaining a share price over $1.00.
Similarly, LINN announced on February 3, 2016 that it borrowed $919 million from its credit line. Total borrowings under the company's credit facility are now $3.6 billion.
Both companies have named Kirkland & Ellis LLC as their legal advisor.
Over the last year, Kirkland & Ellis LLC has advised numerous E&Ps that have filed Chapter 11, including:
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