EP Energy fails to make payment in grace period, secures forbearances

By Caroline Salls

Pittsburgh, Sept. 16 – EP Energy Corp. failed to make the $40 million interest payment due Aug. 15 on the 8% senior secured notes due 2025 issued by wholly owned subsidiaries EP Energy LLC and Everest Acquisition Finance Inc. within the 30-day grace period, according to an 8-K filed Monday with the Securities and Exchange Commission.

The company said its failure to make the interest payment within the grace period constitutes an event of default under the notes indenture and under a credit agreement with JPMorgan Chase Bank, NA.

However, EP Energy said its subsidiaries entered into forbearance agreements with holders of more than 70% of the total outstanding principal amount of the notes and the credit agreement lenders.

Under the forbearance agreements, the noteholders and credit agreement parties have agreed not to exercise any default-related rights through 11:59 p.m. ET on Sept. 22.

The company said it did not make the payment within the grace period “as active discussions with certain of the company’s creditors are still ongoing regarding the company’s evaluation of strategic alternatives.”

The oil and natural gas exploration and production company is based in Houston.

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