Atlas Energy Group entered into an amendment to its first lien credit agreement. The amendment allows for, among other things, the establishment of a second lien position with Riverstone Credit Partners as administrative agent.

The company utilized the second lien position to reduce the first lien position by approximately $36 million, resulting in a first lien position of approximately $35 million. The first lien position will now pay a reduced cash interest rate of LIBOR +150 basis points versus the former rate of LIBOR+800 basis points and also includes an 11% per annum payment “in-kind” feature. The second lien position will be accruing its interest payments “in-kind” at a 30% per annum rate, reducing the cash interest burden of the company.

Existing financial covenants were replaced with the requirement that the company maintain a minimum of $2 million in EBITDA on a trailing 12-month basis, beginning in Q2/2016, and the incorporation into the first lien credit agreement of the financial covenants included in Atlas Resource Partners’ credit agreement, beginning in Q2/2016.

In addition, the second lien credit agreement requires that the company maintain an asset coverage ratio of not less than 2.00 to 1.00, beginning in Q3/2017. The first lien credit agreement and second lien credit agreement mature on September 30, 2017 and March 30, 2019 respectively, and are subject to an optional 12-month extension, assuming certain conditions are met. In connection with the second lien credit agreement, the company agreed to issue within 30 days to the lenders warrants to purchase up to 15% of the company’s outstanding common units representing limited partner interests at an exercise price of 20 cents per unit.