Bellatrix lenders agree to changes to facilities’ financial covenants

By Marisa Wong

Madison, Wis., March 11 – Bellatrix Exploration Ltd. announced that its syndicate of lenders, led by National Bank Financial as lead arranger and bookrunner and National Bank of Canada as administrative agent, has agreed to amendments to some of the financial covenants contained in the agreement governing its bank credit facilities.

The company’s C$725 million of credit facilities are available on an extendible revolving term basis and consist of a C$75 million operating facility provided by a Canadian bank and a C$650 million syndicated facility provided by nine financial institutions, subject to a borrowing base test.

The three-year revolving facilities mature on May 30, 2017, unless extended for a further period not to exceed a maximum term of up to three years.

The borrowing base is subject to redetermination on May 31 and Nov. 30 in each year prior to maturity. The most recent redetermination occurred on Nov. 30, and the next semiannual redetermination is scheduled for May 31.

The agreement governing the credit facilities has established financial covenants of a maximum total debt to EBITDA ratio of 3.5 to 1 (4.0 to 1 for the two fiscal quarters immediately following a material acquisition), a maximum senior debt to EBITDA ratio of 3.0 to 1 (3.5 to 1 for the two fiscal quarters immediately following a material acquisition) and a minimum EBITDA to interest expense (12-month trailing) ratio of 3.5 to 1.

According to a press release, given the precipitous decline in commodity prices, the company’s lending syndicate has agreed to revise both the maximum total debt to EBITDA and maximum senior debt to EBITDA financial covenants as follows:

• 4.75 to 1 for the fiscal quarters ending Sept. 30, 2015, Dec. 31, 2015, March 31, 2016 and June 30, 2016; and

• 4.0 to 1 for the fiscal quarters ending Sept. 30, 2016, Dec. 31, 2016 and March 31, 2017.

During the periods in which these revised financial covenants are in place, the additional automatic relaxation of the debt to EBITDA financial covenants following a material acquisition will not apply.

Beginning with the second quarter of 2017, the maximum senior debt to EBITDA ratio will return to 3.0 to 1 (3.5 to 1 for the two fiscal quarters immediately following a material acquisition) and the maximum total debt to EBITDA ratio will return to 3.5 to 1 (4.0 to 1 for the two fiscal quarters immediately following a material acquisition).

The minimum EBITDA to interest expense ratio of 3.5 to 1 remains unchanged.

As a corollary to these expanded financial covenants, the applicable margin rate will range from 80 basis points to 475 bps, depending on the type of borrowing and the company’s senior debt to EBITDA ratio and the standby fee will range from 40.5 bps to 106.875 bps on the undrawn portion of the credit facilities, depending on the senior debt to EBITDA ratio.

Bellatrix is an oil and gas company based in Calgary, Alta.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.