Southwestern Energy entered into agreements with substantially all of its bank group for its $2.0 billion revolving line of credit and its $750 million term loan to extend maturities and modify certain other terms and conditions of the credit facilities.

According to a related 8-K filing, JPMorgan Chase served as administrative agent for the lender group. Bank of America and Wells Fargo served as syndication agents and Citibank and Mizuho Bank served as co-documentation agents. J.P. Morgan was  sole lead arranger and sole bookrunner.

The principal terms include the following:

  • The company has entered a new $1.934 billion credit facility, consisting of a $1.191 billion secured term loan and a $743 million revolving credit facility, both due December 14, 2020.
  • The $1.191 billion secured term loan is fully drawn, with approximately $285 million of this balance being used to pay down the existing revolving credit facility balance in its entirety and the remaining amount available for liquidity purposes. The company does not expect to borrow under the new revolving credit facility in the near term.
  • Interest rates will be 0.50% above levels in the company’s existing revolving credit facility.  Following this transaction, the company’s current credit ratings result in an interest rate of 2.50% above LIBOR.
  • Collateral for the new secured term loan is principally E&P properties in the Fayetteville Shale area. This collateral also may support all or a part of revolving credit extensions depending on restrictions in the Company’s senior notes indentures. The facilities have no borrowing base redeterminations but require a 1.50x collateral coverage ratio.
  • The existing $750 million term loan is extended to December 14, 2020, provided at least $375 million is paid by June 30, 2017.

“We have taken a significant step in managing our debt maturities and liquidity,” said Bill Way, president and chief executive officer.  “We have extended liquidity availability and a major portion of our debt by two years with only modest additional cost and covenants.  These actions deliver on the plan we discussed previously to strengthen the balance sheet, which is a key component of setting the company up for value adding growth.  We truly value the strong relationships we have with our bank group and appreciate the hard work and trust that the participating banks demonstrated in us throughout this amendment and extension process.”