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Eagle Rock Amends Credit Facility With Wells Fargo, Others

October 15, 2014, 06:40 AM
Filed Under: Energy

Eagle Rock Energy Partners, L.P. has amended its five-year senior secured credit facility originally entered into on June 22, 2011 with a syndicate of banks led by Wells Fargo, N.A. as administrative agent, and Bank of America, N.A. and Royal Bank of Scotland plc as co-syndication agents. Current commitments total $320 million, with the ability to increase commitments up to $1.2 billion. The facility matures in October 2019, extended from Eagle Rock's former senior secured credit facility, as amended, which was scheduled to mature in June 2016. This amendment coincides with the semi-annual redetermination of the borrowing base, and the next redetermination will be April 2015.

The Regency Energy Partners units that the Partnership received as part of its Midstream Business Contribution are not collateralized under the credit facility agreement.

The amended credit agreement is a more traditional reserve-based facility for a pure-play upstream MLP, and includes revised covenants and improved fee pricing, as follows:

  • Total Leverage Ratio of no greater than 4.0x LTM EBITDA (increases to 4.5x LTM EBITDA for the two periods following an acquisition above $50mm)
  • Current Ratio of no less than 1.0x
  • Removal of Senior Secured Leverage Ratio covenant
  • Removal of Interest Coverage Ratio covenant
  • Improved fee pricing by 25 basis points on all tranches except the Commitment Fee, which remains relatively the same

"We are pleased with the support shown by our lender group, which includes several institutions continuing long-term relationships with Eagle Rock and others beginning new strategic relationships," said Bob Haines, the Partnership's Chief Financial Officer. "The refinancing of our credit facility, together with our strong balance sheet and liquidity position, provides further long-term stability and financial flexibility to Eagle Rock's capital structure as we continue to focus on our growth strategy."

Eagle Rock is a growth-oriented master limited partnership engaged in (a) the exploitation, development, and production of oil and natural gas properties and (b) ancillary gathering, compressing, treating, processing and marketing services with respect to its production of natural gas, natural gas liquids, condensate and crude oil.

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