Bellatrix wraps exchange of $80 million 8˝% notes due 2020

By Wendy Van Sickle

Columbus, Ohio, Sept. 11 – Bellatrix Exploration Ltd. closed a debt refinancing transaction that immediately extends the maturity of more than a third of its existing 8˝% senior notes due 2020 by three years, reduces its outstanding debt by about C$10.5 million prior to any new money advances and sets the stage for further 2020 note exchanges and/or acquisitions.

Bellatrix said in a news release issued Tuesday that it expects the transaction will significantly increase its ability to refinance all of the remaining 2020 notes ahead of their stated maturity, while minimizing equity dilution to the company’s shareholders.

Under the transaction, which was first announced on July 26, Bellatrix exchanged $80 million of its 2020 notes for $72 million of 8˝% second-lien notes due 2023.

Under the agreement with funds advised by FS/EIG Advisor, LLC and FS/KKR Advisor, LLC, holders also agreed to subscribe for $30 million to $40 million of additional second-lien notes, with the proceeds to be used for drilling and acquisitions and exchanges of 2020 notes.

At closing, Bellatrix drew down $15 million of this new money commitment.

Noteholders also agreed to allow for up to $50 million of additional second-lien notes to be issued only for future 2020 note exchanges by Dec. 31, as previously reported.

The agreement also provides for the issue of additional subordinate secured and unsecured debt in subsequent refinancing and capital raising transactions.

In connection with the transactions completed on Tuesday, the lenders under the company’s revolving credit facility reconfirmed the borrowing base at C$100 million with total commitments set at C$95 million.

“We are very pleased with the consummation of this financing” Bellatrix president and chief executive officer Brent Eshleman said in the news release.

“It is one step of many that we have undertaken or plan to take to address the current weak natural gas price environment. Bellatrix has a very strong asset base that we believe will produce strong value for years into the future.

“We are committed to having a capital structure and cost structure that complement our strong asset base in this challenging environment.”

The oil and gas exploration and production company is based in Calgary, Alta.

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