Vanguard Natural Resources, LLC Elects to Exercise Grace Period for Payment of Interest on Senior Notes
October 03 2016 - 7:00AM
Vanguard Natural Resources, LLC (NASDAQ:VNR) (“Vanguard” or “the
Company”) announced today that it has elected not to make the
approximately $15 million semi-annual interest payment due on
October 3, 2016 on approximately $381.8 million in aggregate
principal amount of 7.785% of Senior Notes due 2020 (the
“Notes”).Vanguard made the decision to take advantage of the
applicable grace period under the indenture governing the Notes
following discussions with Vanguard’s lenders (“First Lien
Lenders”) under its first lien credit facility (the “Credit
Facility”). The First Lien Lenders consented to the Company’s
decision to preserve liquidity and flexibility pending the outcome
of the fall borrowing base redetermination on the Credit Facility
and as the Company continues to engage in constructive dialogue
with new potential capital sources. In connection with this
decision regarding the interest payment on the Notes, the Company
and the First Lien Lenders entered into a waiver under the Credit
Facility which allowed the Company to use the grace period provided
under the Notes without triggering an event of default under the
Credit Agreement.
Vanguard can elect to make the interest payments due under the
Notes at any time during the grace period, but, if the payment is
not made within 30 days of October 1, 2016, such nonpayment would
become an event of default. Upon an event of default under the
indenture governing the Notes, the trustee or holders of not less
than 25% in aggregate principal amount of the Notes then
outstanding may declare the principal amount of the Notes plus
accrued and unpaid interest to be due and payable. A failure to pay
interest on the Notes following the expiration of the 30-day grace
period would also result in events of default under the Credit
Facility and the indenture governing 7.0% Senior Secured Second
Lien Notes Due 2023 (the “Second Lien Notes”), which would entitle
the trustee under the indenture governing the Second Lien Notes and
the First Lien Lenders to declare all obligations thereunder to be
immediately due and payable.
The Company engaged Evercore pursuant to an agreement dated
August 1, 2016 as its financial advisor to assist the Board of
Directors and management team with respect to identifying and
negotiating with new potential capital sources and other financial
matters as deemed necessary. Paul Hastings LLP continues to
act as the Company’s legal advisor.
About Vanguard Natural Resources,
LLC
Vanguard Natural Resources, LLC is a publicly
traded limited liability company focused on the acquisition,
production and development of oil and natural gas properties.
Vanguard's assets consist primarily of producing and non-producing
oil and natural gas reserves located in the Green River Basin in
Wyoming, the Permian Basin in West Texas and New Mexico, the Gulf
Coast Basin in Texas, Louisiana, Mississippi and Alabama, the
Anadarko Basin in Oklahoma and North Texas, the Piceance Basin in
Colorado, the Big Horn Basin in Wyoming and Montana, the Arkoma
Basin in Arkansas and Oklahoma, the Williston Basin in North Dakota
and Montana, the Wind River Basin in Wyoming and the Powder River
Basin in Wyoming. More information on Vanguard can be found at
www.vnrllc.com.
INVESTOR RELATIONS CONTACT:
Vanguard Natural Resources, LLC
Lisa Godfrey, Director of Investor Relations
832-327-2234
investorrelations@vnrllc.com