HOUSTON, June 27, 2016 /PRNewswire/ -- Southwestern
Energy Company (NYSE: SWN) today announced that it has entered into
agreements with substantially all of its bank group for its
$2.0 billion revolving line of credit
and its $750 million term loan to
extend maturities and modify certain other terms and conditions of
the credit facilities.
"We have taken a significant step in managing our debt
maturities and liquidity," said Bill
Way, President and Chief Executive Officer. "We have
extended liquidity availability and a major portion of our debt by
two years with only modest additional cost and covenants.
These actions deliver on the plan we discussed previously to
strengthen the balance sheet, which is a key component of setting
the Company up for value adding growth. We truly value the
strong relationships we have with our bank group and appreciate the
hard work and trust that the participating banks demonstrated in us
throughout this amendment and extension process."
The principal terms include the following:
- The Company has entered a new $1.934
billion credit facility, consisting of a $1.191 billion secured term loan and a
$743 million revolving credit
facility, both due December 14, 2020,
with the following features:
- The $1.191 billion secured term
loan is fully drawn, with approximately $285
million of this balance being used to pay down the existing
revolving credit facility balance in its entirety and the remaining
amount available for liquidity purposes. The Company does not
expect to borrow under the new revolving credit facility in the
near term.
- Interest rates will be 0.50% above levels in the Company's
existing revolving credit facility. Following this
transaction, the Company's current credit ratings result in an
interest rate of 2.50% above LIBOR.
- Collateral for the new secured term loan is principally E&P
properties in the Fayetteville Shale area. This collateral
also may support all or a part of revolving credit extensions
depending on restrictions in the Company's senior notes indentures.
The facilities have no borrowing base redeterminations but require
a 1.50x collateral coverage ratio.
- Financial covenants and restrictions in the new credit facility
include:
- Minimum interest coverage of 0.75x in 2016 increasing by 0.25x
increments to 1.50x in 2019 and 2020;
- Minimum liquidity requirement of $300
million subject to increase up to $500 million upon certain conditions; and
- Anti-hoarding provision requiring unrestricted cash in excess
of $100 million to pay down any
amounts borrowed under the revolving credit facility.
- The existing $750 million term
loan is extended to December 14,
2020, provided at least $375
million is paid by June 30,
2017.
- The Company expects to pay down this loan, using proceeds from
its previously announced $450 million
sale of undeveloped properties in West
Virginia or other sources, triggering this extension.
- All net proceeds from future asset sales and certain debt and
equity issuances are required to reduce any amounts borrowed under
the existing $750 million term
loan.
- This existing term loan remains unsecured and interest rates
increase to the same level as the new revolver and term loan.
- The Company's existing unsecured revolving credit agreement due
in December 2018 remains in place but
with the aggregate commitment reduced to $66
million.
A more detailed description of the new and the amended credit
agreements, along with copies of the agreements, appears in a
Current Report on Form 8-K that the company contemporaneously is
filing with the Securities and Exchange Commission.
Southwestern Energy Company is an independent energy company
whose wholly owned subsidiaries are engaged in natural gas and oil
exploration, development and production, natural gas gathering and
marketing. Additional information on the company can be found on
the Internet at http://www.swn.com.
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"intend," "plan," "project," "estimate," "continue," "potential,"
"should," "could," "may," "will," "objective," "guidance,"
"outlook," "effort," "expect," "believe," "predict," "budget,"
"projection," "goal," "forecast," "target" or similar words.
Statements may be forward looking even in the absence of these
particular words. Where, in any forward-looking statement, the
company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual
results of operations can and will be affected by a variety of
risks and other matters including, but not limited to, changes in
commodity prices; changes in expected levels of natural gas and oil
reserves or production; operating hazards, drilling risks,
unsuccessful exploratory activities; limited access to capital or
significantly higher cost of capital related to illiquidity or
uncertainty in the domestic or international financial markets;
international monetary conditions; unexpected cost increases;
potential liability for remedial actions under existing or future
environmental regulations; potential liability resulting from
pending or future litigation; and general domestic and
international economic and political conditions; as well as changes
in tax, environmental and other laws applicable to our business.
Other factors that could cause actual results to differ materially
from those described in the forward-looking statements include
other economic, business, competitive and/or regulatory factors
affecting our business generally as set forth in our filings with
the Securities and Exchange Commission. Unless legally required,
Southwestern Energy Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
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SOURCE Southwestern Energy Company