Pacific announces an extension of covenant relief under its revolving credit agreements
Pacific Exploration & Production Corp. (TSX: PRE) (BVC: PREC) announced today that it has obtained an extension of the waivers previously granted by its lenders in respect of the covenant that requires the Company to maintain its consolidated net worth above U.S.$1 billion (the "Net Worth Covenant"). In addition to the waiver of the Net Worth Covenant, the lenders have granted a waiver in respect of the Company's consolidated leverage ratio of 4:50:1:00, which reflects the permitted gross debt to trailing twelve month adjusted EBITDA (collectively, the "Covenants"), the Corp. said Monday in a news release.
As previously announced on December 17, 2015, certain of the Company's lenders have formed a steering committee (the "Steering Committee") to negotiate the extension of the waivers of the Covenants (the "Waivers").
The Waivers have been granted for a period of 61 days and will expire on February 26, 2016 (the "Waiver Period"), subject to the satisfaction of certain terms and conditions (including the Company and the Steering Committee reaching an agreement on or before January 14, 2016 with respect to a covenant providing for the minimum amount of unrestricted cash to be retained by the Company throughout the Waiver Period). As consideration for entering into the Waivers, the Company has also agreed to certain restrictions on non-ordinary course transactions and agreed to work with the lenders and their financial and legal advisors during the Waiver Period.
The Waivers were obtained in respect of the: (i) U.S.$1 billion revolving credit and guaranty agreement with a syndicate of lenders and Bank of America, N.A, as administrative agent; (ii) U.S.$250 million credit and guaranty agreement with HSBC Bank USA, N.A., as agent; (iii) U.S.$109 million credit and guaranty agreement with Bank of America, N.A., as lender; and (iv) U.S.$75 million master credit agreement with Banco Latino Americano de Comercio Exterior, S.A., as lender.
About Pacific
Pacific is a Canadian public company and a leading explorer and producer of natural gas and crude oil, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in more than 85 exploration and production blocks in seven countries including Colombia, Peru, Guatemala, Brazil, Guyana, Papua New Guinea, Mexico and Belize. The Company's strategy is focused on sustainable growth in production & reserves and cash generation. Pacific Exploration & Production is committed to conducting business safely, in a socially and environmentally responsible manner.
