Ithaca Energy: Extended Bank Debt Facilities
Ithaca Energy Inc. announces that it has executed extended and simplified bank debt financing facilities totaling $650 million, providing the Company with significant funding headroom ahead of first hydrocarbons from the Greater Stella Area in the second quarter of 2016.
Highlights
Total bank debt facilities sized at $650 million, comprising a senior Reserve Based Lending (“RBL”) facility of $575 million and junior RBL facility of $75 million
Replacement of the former corporate facility with a junior RBL removes the use of historic financial covenant tests from the debt facilities and ensures the funding capacity is reflective of the future value of the Company’s assets
* The term of both bank debt facilities is now extended to September 2018
* Total Company debt funding capacity of $950 million with inclusion of the $300 million senior unsecured notes due July 2019
* Forecast peak debt requirement prior to Stella start-up of $825-850 million in the second quarter of 2015, resulting in headroom of over $100 million
Graham Forbes, Chief Financial Officer, commented, “We are pleased to have promptly and efficiently extended the tenor of our RBL facility on terms similar to our existing facility and converted our corporate facility from one based on historic covenants into a forward looking junior RBL thanks to the strong support of our banking syndicate.”
“The facilities are ‘right sized’ for our needs as we begin the process of deleveraging the business following completion of all offshore drilling operations prior to Stella first oil and receipt of the proceeds from the sale of the Norwegian business expected in Q3-2015.”
Further Information
Both RBL facilities are based on conventional oil and gas industry borrowing base financing terms, with loan maturities in September 2018, and are available to fund on-going development activities and general corporate purposes.
The combined interest rate of the two bank debt facilities, fully drawn, is LIBOR +3.4% (previously 3.2%) prior to Stella coming on-stream, stepping down to LIBOR +2.9% (previously 2.9%) after Stella production has been established.
The overall fully drawn weighted average debt costs of the business including the unsecured senior notes remains under 5%.
The banks in the debt syndicate are: BNP Paribas, Scotiabank, Deutsche Bank AG (DB), Lloyds Bank, Royal Bank of Scotland, Barclays Bank PLC, Commonwealth Bank of Australia (CMWAY), Skandinaviska Enskilda Banken AB (publ), Société Générale and NIBC.