Legacy Reserves obtains credit facility waiver relating to acquisition

By Marisa Wong

Madison, Wis., Nov. 15 - Legacy Reserves LP entered into a limited waiver to its second amended and restated credit agreement dated March 20, 2011 with Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the lenders have agreed to waive

• An interest rate hedging covenant from the date outstanding borrowings are repaid with proceeds from an issuance and sale of units through and including the earlier of Jan. 31 and the redetermination date of the borrowing base in connection with the closing of an acquisition of certain assets from Concho Resources, Inc.;

• The requirement that the partnership pay breakage costs, if any, in connection with the payment of outstanding borrowings;

• The requirement that the borrowing base be automatically reduced as a result of an issuance of senior notes from Nov. 14 through the earlier of Jan. 31 and the redetermination date of the borrowing base in connection with the acquisition; and

• In the event that the acquisition does not close on or prior to Jan. 31, certain restrictions contained in the credit agreement so that the company can redeem in full any senior notes with proceeds held in escrow from the issuance of such senior notes.

As of Nov. 9, the partnership had about $522 million of borrowings outstanding under the credit agreement, of which $52 million was used for the acquisition.

The next borrowing base redetermination is scheduled for April 2013. However, the company said it intends to seek an interim redetermination of the borrowing base in connection with the closing of the acquisition.

The waiver was completed on Nov. 14.

Legacy Reserves is an independent oil and natural gas limited partnership based in Midland, Texas.

© 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.