GeoMet amends loan, gaining time to cure borrowing base deficiency

By Sara Rosenberg

New York, Aug. 9 - GeoMet Inc. amended its credit facility, extending the time available to cure the existing borrowing base deficiency and eliminating the availability of loans to be made on a revolving basis, according to a news release.

The borrowing base is currently set at $115 million. Outstanding loans will be classified as tranche A loans, and any additional loans will be classified as tranche B loans.

If a future redetermination of the borrowing base results in a deficiency exceeding $33.6 million, the company has 30 days to repay the excess. The next borrowing base determination is scheduled for December.

The credit facility due April 1, 2014 has pricing of Libor plus 300 basis points on the tranche A and Libor plus 500 bps on the tranche B. This compares to prior pricing of Libor plus 275 bps.

Also, the unused fee was replaced with a fee equal to a percentage of the tranche B outstanding, payable on Dec. 1 and at the end of each three month period thereafter through Dec. 1, 2013. This fee will be 75 bps initially and will increase by 25 bps each quarter to a maximum fee of 175 bps on Dec. 1, 2013.

In addition, the amendment removed all financial covenants.

The facility has a maximum loan balance of $146.2 million at Sept. 30, reducing as of the last day of each fiscal quarter through Dec. 31, 2013, at which time the maximum balance will be $129 million.

Lenders were paid a fee equal to 0.5% of the initial tranche B at closing of the amendment.

GeoMet is a Houston-based independent energy company.

© 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.