Mr. Graham Forbes reports
ITHACA ENERGY INC ANNOUNCES EXTENDED BANK DEBT FACILITIES
Ithaca Energy Inc. has executed extended and simplified bank debt financing facilities totalling $650-million, providing the company with significant financing 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 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 financing 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 financing 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-million to $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 rightsized 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 finance continuing development activities and general corporate purposes.
The combined interest rate of the two bank debt facilities, fully drawn, is Libor plus 3.4 per cent (previously 3.2 per cent) prior to Stella coming on stream, stepping down to Libor plus 2.9 per cent (previously 2.9 per cent) after Stella production has been established.
The overall fully drawn weighted average debt costs of the business including the unsecured senior notes remain under 5 per cent.
The banks in the debt syndicate are: BNP Paribas, Scotiabank, Deutsche Bank AG, Lloyds Bank, Royal Bank of Scotland, Barclays Bank PLC, Commonwealth Bank of Australia, Skandinaviska Enskilda Banken AB (publ), Societe Generale and NIBC.
We seek Safe Harbor.