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Bankrupt EP Energy Receives Commitment From JPMorgan Chase to Convert DIP Into $629.4M Exit Pact

December 02, 2019, 08:55 AM
Filed Under: Energy
Related: Bankruptcy

EP Energy Corporation, which filed voluntary petitions for Chapter 11 on Oct. 3 in the United States Bankruptcy Court for the Southern District of Texas, has entered into a Senior Secured Superpriority Debtor-In-Possession Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders under EP Energy LLC’s prepetition reserve based credit facility.

Under the DIP Credit Agreement and the Order, a portion of the Prepetition RBL Facility was converted into commitments under the DIP Credit Agreement which provides for a $314,710,456 debtor-in-possession senior secured superpriority revolving credit facility, and the loans , and which includes a letter of credit sublimit of $50,000,000.

The Debtors have received an underwritten commitment from the DIP Lenders to convert their DIP Loans and their remaining claims under the Prepetition RBL Facility into a $629,420,912 exit senior secured reserve-based revolving credit facility subject to certain conditions set forth therein, which will be evidenced by a senior secured revolving credit agreement, by and among EP Energy LLC, as borrower, the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent.

EP Energy LLC will use the proceeds of the DIP Facility for, among other things, (i) the acquisition, development and exploration of oil and gas properties, for working capital and general corporate purposes, (ii) the payment of professional fees as provided for in the Order, (iii) the payment of expenses incurred in the administration of the Chapter 11 Cases or as permitted by the certain orders and (iv) payments due thereunder or under the Order.

The maturity date of the DIP Facility is the earlier of (a) November 25, 2020, (b) the effective date of an “Acceptable Plan of Reorganization” (as defined in the DIP Credit Agreement), (c) the closing of a sale of substantially all of the equity or assets of EP Energy LLC (unless consummated to an Acceptable Plan of Reorganization), or (d) the termination of the DIP Facility during the continuation of an event of default.

The DIP Loans will bear interest at a rate per annum equal to (i) adjusted LIBOR plus an applicable margin of 3.50% or (ii) an alternative base rate plus an applicable margin of 2.50%, in each case, as selected by EP Energy LLC. Any undrawn delayed draw term loans will be subject to an undrawn fee at a rate per annum equal to 0.50%.

The DIP Facility is secured by a senior secured superpriority perfected security interest on substantially all assets of EP Energy LLC and any subsidiary guarantors. The security interests and liens

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