ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On April 13, 2018, Range Resources Corporation
(Range) entered into an amended and restated revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders and agents party thereto (the Credit Agreement). The Credit Agreement is
initially a senior secured reserve based revolving credit facility with an aggregate maximum principal amount of $4.0 billion, a borrowing base of $3.0 billion and total lender commitments of $2.0 billion. The new agreement has a
maturity date of April 13, 2023.
The Credit Agreement is guaranteed by all current and any future material domestic subsidiaries of Range. The
agreement provides for the issuance of letters of credit in an aggregate stated amount not to exceed $500 million. Additionally, upon the receipt of an investment grade rating from either Moodys Investors Service, Inc., or
Standard & Poors Ratings Services, Range may elect to release collateral securing the facility and forego adding future guarantors (the Investment Grade Period).
Range can make borrowings under the credit facility at (i) the Alternate Base Rate, plus a margin ranging from 0.25% to 1.25% during a
non-Investment
Grade Period and from 0.125% to 0.75% during an Investment Grade Period or (ii) for Eurodollar borrowings, at the Adjusted LIBO Rate, plus a margin ranging from 1.25% to 2.25% during a
non-Investment
Grade Period and from 1.125% to 1.75% during an Investment Grade Period. The undrawn portion of the total commitments will be subject to a commitment fee ranging from 0.300% to 0.375% during a
non-Investment
Grade Period and from 0.150% to 0.300% during an Investment Grade Period.
During a
non-Investment
Grade Period, the applicable margin and commitment fee are dependent upon borrowings relative to the then-effective borrowing base, whereas during an Investment Grade Period the applicable margin and
commitment fees are determined by the highest credit rating. During a
non-Investment
Grade Period, the borrowing base will be redetermined by the lenders annually beginning May 1, 2019, and at certain
other times as permitted under the Credit Agreement. Range and the lenders may each request one unscheduled borrowing base redetermination between each scheduled redetermination, as well as a redetermination in connection with a material
acquisition. The borrowing base may be automatically reduced by certain divestitures or upon cancellation of certain hedging positions.
The Credit
Agreement contains customary financial and
non-financial
covenants. Range must maintain (i) during an Investment Grade Period if Range has both (a) a senior unsecured debt rating from Moodys of
Baa3 or better and (b) a long-term issuer rating from S&P of
BBB-
or better, a ratio of Consolidated Funded Debt to Consolidated EBITDAX less than or equal to 4.25 to 1.0, (ii) a ratio of
Consolidated Current Assets to Consolidated Current Liabilities greater than or equal to 1.0 to 1.0, (iii) if an Investment Grade Period is not in effect or if Range does not have both (a) a senior unsecured debt rating from Moodys
of Baa3 or better and (b) a long-term issuer rating from S&P of
BBB-
or better, a ratio of the
PV-9
of its oil and gas properties to Consolidated Funded Debt
greater than or equal to 1.50 to 1.00, and (iv) if an Investment Grade Period is not in effect or if Range does not have both (a) a senior unsecured debt rating from Moodys of Baa3 or better and (b) a long-term issuer rating
from S&P of
BBB-
or better, a ratio of Consolidated EBITDAX to Consolidated Interest Charges paid in cash of greater than or equal to 2.50 to 1.00.
In addition, the Credit Agreement contains various covenants that limit, among other things, Ranges ability to: incur indebtedness; grant liens; engage
in certain mergers, consolidations, liquidations and dissolutions; engage in certain sales of assets; make distributions and dividends; enter into transactions with affiliates; and make certain acquisitions and investments. The Credit Agreement
allows Range to hedge up to 90% of its Projected Volume.
If an event of default exists under the Credit Agreement, the lenders will be able to accelerate
the maturity of the credit facility and exercise other rights and remedies. An event of default includes, among other things: nonpayment of principal when due; nonpayment of interest, fees or other amounts (subject to a
five-day
grace period); material inaccuracy of representations and warranties; violation of covenants; cross-default to debt in excess of $125 million beyond any applicable grace period; bankruptcy events;
certain ERISA events; judgments in excess of $125 million; and a change in control.
During any
non-Investment
Grade Period, the Credit Agreement will be
secured by sufficient mortgages on Ranges oil and gas properties such that the
PV-9
of mortgaged properties represent at least 180% of total lender commitments. In addition, the Credit Agreement will be
secured by a pledge of the equity interests in Ranges Restricted Subsidiaries, and a security interest granted in substantially all of the other assets of Range and any subsidiary guarantors.
The preceding summary of the material terms of the Credit Agreement is qualified in its entirety by the full text of the Credit Agreement, which is filed
herewith as Exhibit 10.1. In the event of any discrepancy between the preceding summary and the text of the Credit Agreement, the text of the Credit Agreement shall control.