Lonestar Resources announced the closing of a new $500 million senior secured credit facility, which replaces its previous $400 million facility.
Lonestar said the new facility was arranged by Citibank, and importantly, features an expanded borrowing base of $180 million, an increase of $30 million associated with the $150 million borrowing base under its previous facility. There are several additional upgraded features related to the new facility which include:
- Improved Liquidity- At June 30, 2015, Lonestar had $76 million drawn on its facility, yielding $74 million of liquidity. Proforma its new facility, liquidity is $104 million, an improvement of 41%.
- Reduction in interest rate grid-under its new facility, the spread over LIBOR interest rates is 25 basis points better than under its previous facility. At current levels, Lonestar’s interest rate has been reduced from 2.73% to 2.48%.
- Extension in Maturity Date- Lonestar’s new credit facility matures on October 16, 2018, representing a 7 month of extension versus its prior facility.
- Expanded Bank Group-ABN Amro, Texas Capital Bank and Bank of Texas each expanded their commitments under the new facility. Additionally, Lonestar added to the long-term capacity of the facility by adding three new banks: Comerica, BBVA Compass, and Barclays.
“We are extremely pleased with our expanded facility. It provides immediate benefits of increased capital availability at a lower interest cost,” said Lonestar’s CEO and managing director. “The facility also affords Lonestar an enhanced ability to hedge while leaving that decision completely at the discretion of the Company. Longer term, the facility’s maturity is extended by 20% and the increased number of large lenders in our group gives Lonestar the capability to substantially expand borrowing base among current lenders, which should streamline future expansions in the credit facility.”