Coterra Energy enters $1.5 billion revolving credit agreement

By Mary-Katherine Stinson

Lexington, Ky., March 16 – Coterra Energy Inc. on March 10 signed a revolving credit agreement totaling $1.5 billion with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility includes a discretionary swingline sub-facility of up to $100 million and a letter-of-credit sub-facility of up to $500 million.

The company may also increase the revolving commitments by up to an additional $500 million subject to certain conditions.

Borrowings will bear interest at SOFR plus 100 basis points to 175 bps based on the company’s credit rating plus a credit spread adjustment of 10 bps.

There is also a commitment fee from 10 bps to 27.5 bps.

The credit agreement matures on March 10, 2028 with two optional one-year extensions upon the agreement of the company and lenders holding 50% of the commitments.

Additionally, the agreement contains customary covenants, including the maintenance of a maximum leverage ratio of no more than 3x as of the last day of any fiscal quarter until such time as the company has no other debt exceeding $75 million outstanding that has a financial maintenance covenant based on a leverage ratio. At that point, the credit agreement requires maintenance of a ratio of total debt to total capitalization of no more than 65%.

JPMorgan Chase Bank, NA, BofA Securities, Inc., Bank of Nova Scotia, Houston Branch, PNC Capital Markets LLC, TD Securities (USA) LLC, U.S. Bank NA and Wells Fargo Securities, LLC are the joint lead arrangers and joint bookrunners.

Bank of America, NA, Bank of Nova Scotia, Houston Branch, PNC Capital Markets LLC, TD Securities (USA) LLC, U.S. Bank NA and Wells Fargo Securities, LLC are the syndication agents.

Citibank, NA, Truist Bank, Royal Bank of Canada and Canadian Imperial Bank of Commerce, New York Branch are the co-documentation agents.

Concurrently with entry into the credit agreement the company terminated its existing second amended and restated credit agreement dated as of April 22, 2019.

Coterra is a Houston-based independent natural gas producer.

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