Rex Energy noteholders agree to forbearance; lenders grant extension

By Marisa Wong

Morgantown, W.Va., May 3 – Rex Energy Corp. entered into a forbearance agreement on May 3 with holders of its 1%/8% senior secured second-lien notes due 2020, according to an 8-K filing with the Securities and Exchange Commission.

The holders agreed to forebear through May 9 from exercising their rights and remedies under the indenture with respect to some defaults, including a default due to the company failing to make an interest payment on the notes.

The second-lien forbearance agreement does not cure or waive the existing defaults, the filing noted.

As previously reported, the company is also party to a third forbearance agreement dated April 23 with Macquarie Bank Ltd. as the issuer of letters of credit under the company’s term loan credit agreement dated April 28, 2017.

Under the third forbearance agreement, agent Angelo, Gordon Energy Servicer, LLC and the lenders agreed to forbear from exercising their rights and remedies under the credit agreement with respect to some defaults and alleged defaults through May 2.

The agent and the borrower agreed to extend the forbearance period through May 9.

However, the third forbearance agreement did not prevent the agent from accelerating the amounts owed under the credit agreement but prevented the agent from taking any enforcement actions with respect to any accelerated obligations during the forbearance period.

As a result, on April 27 the company received a written notice of acceleration of the outstanding amounts due under the credit agreement, including notes and loans, together with all accrued interest, all fees, any yield maintenance amount, any call protection amount and any other similar amounts.

The aggregate amount due under the credit agreement is about $255 million, not including any yield maintenance and call protection amounts due.

However, because the forbearance period is in effect and continuing, the agent is prevented from taking any enforcement actions with respect to the accelerated amounts.

The company extended the forbearance agreement for the term loan and entered into the forbearance agreement for the second-lien notes for additional time to continue discussions with its lenders and other stakeholders regarding potential transactions and to continue considering strategic financing proposals that management believes may be beneficial to the company and its stakeholders, the filing said.

Based in State College, Pa., Rex Energy is an oil and gas exploration and production company.

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