Pioneer Natural obtains five-year $1.5 billion revolving facility

By Wendy Van Sickle

Columbus, Ohio, Oct. 30 – Pioneer Natural Resources Co. entered into a five-year $1.5 billion revolving credit agreement on Oct. 24, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement matures on Oct. 24, 2023 and has two one-year extension options.

Borrowings and letters of credit bear interest at Libor plus a margin that is currently 125 basis points and can range from 100 bps to 175 bps, depending on Pioneer’s debt ratings.

The fee for unused commitments ranges from 10 bps to 25 bps and is initially 15 bps, based on Pioneer’s current ratings.

Wells Fargo Securities, LLC, Bank of America Merrill Lynch and JPMorgan Chase Bank, NA are the lead arrangers and joint bookrunners.

Bank of Montreal, Citibank, NA, Goldman Sachs Bank USA, MUFG Bank, Ltd. and Royal Bank of Canada are the co-documentation agents.

Bank of America, NA and JPMorgan are the co-syndication agents.

Wells Fargo Bank, NA is the administrative agent.

The credit agreement replaces the company’s five-year second amended and restated revolving credit agreement dated March 31, 2011, under which the company had no outstanding borrowings at closing of the new credit agreement.

Under the new credit agreement, the dollar threshold for cross default to other debt increased to $150 million from $75 million.

Also, the financial covenant was revised such that total net debt replaces total debt in the ratio calculation, and the maximum ratio of total net debt to book capitalization less intangible assets, accumulated other comprehensive income and some noncash asset impairments was increased to 0.65 times from 0.60 times.

Additionally, the maximum amount of permitted subsidiary debt was revised to an amount equal to 10% of the company’s consolidated net tangible assets from a fixed amount of $500 million.

Proceeds may be used for general corporate purposes.

Pioneer is an independent oil and gas exploration and production company based in Irving, Texas.

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