Item 1.01
Entry into a Material Definitive Agreement.
On September 7, 2017, Halcón Resources Corporation (the Company) entered into an Amended and Restated Senior Secured Revolving Credit Agreement (the A&R Credit Agreement) by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions party thereto, as lenders. The A&R Credit Agreement amends and restates in its entirety the Senior Secured Revolving Credit Agreement entered into on September 9, 2016 (as amended, the Original Credit Agreement). Pursuant to the A&R Credit Agreement, the lenders party thereto have agreed to provide the Company with a $140.0 million senior secured reserve-based revolving credit facility (the Credit Facility and the loans thereunder, the Loans).
The maturity date of the Credit Facility is the earlier of (i) September 7, 2022 and (ii) the 180th day prior to the stated maturity date of February 15, 2022 with respect to the Companys 2022 Second Lien Notes (defined below), if such notes have not been refinanced, redeemed or repaid in full on or prior to such 180th day. Until such maturity date, the Loans under the A&R Credit Agreement shall bear interest at a rate per annum equal to (i) the alternative base rate plus an applicable margin of 1.25% to 2.25%, based on the borrowing base utilization percentage under the Credit Facility or (ii) adjusted LIBOR plus an applicable margin of 2.25% to 3.25%, based on the borrowing base utilization percentage under the Credit Facility.
The Company may elect, at its option, to prepay any borrowing outstanding under the A&R Credit Agreement without premium or penalty (except with respect to any break funding payments, which may be payable pursuant to the terms of the A&R Credit Agreement). The Company may be required to make mandatory prepayments of the Loans under the Credit Facility in connection with certain borrowing base deficiencies.
Amounts outstanding under the A&R Credit Agreement are guaranteed by certain of the Companys direct and indirect subsidiaries and secured by a security interest in substantially all of the assets of the Company and such direct and indirect subsidiaries.
The A&R Credit Agreement contains certain customary representations and warranties, including organization; powers; authority; enforceability; approvals; no conflicts; financial condition; no material adverse effect; litigation; environmental matters; compliance with laws; no defaults; Investment Company Act; taxes; ERISA; disclosure; no material misstatements; properties and titles; maintenance of properties; gas imbalances; prepayments; marketing of production; swap agreements; use of proceeds; solvency; money laundering; anti-corruption laws and sanctions.
The A&R Credit Agreement also contains certain affirmative and negative covenants, including delivery of financial statements; conduct of business; reserve reports; title information; indebtedness; liens; dividends and distributions; investments; sale or discount of receivables; mergers; sale of properties; termination of swap agreements; transactions with affiliates; negative pledges; dividend restrictions; gas imbalances; take-or-pay or other prepayments and swap agreements.
The A&R Credit Agreement also contains certain financial covenants, including the maintenance of (i) a ratio of Consolidated Total Net Debt (as defined in the A&R Credit Agreement) to EBITDA not to exceed 4.00:1.00, and (ii) a Current Ratio (as defined in the A&R Credit Agreement) not to be less than 1.00:1.00, each determined as of the last day of any fiscal quarter period.
The A&R Credit Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy.
The foregoing description of the A&R Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the A&R Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
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