Quest Cherokee gets waiver of defaults; amends loan to allow for note issuance, increased interest rates

By Sara Rosenberg

New York, Feb. 23 - Quest Cherokee LLC received a waiver from loan lenders of all existing defaults under its credit facility and amended the facility to allow for the issuance of $7 million subordinated notes to Cherokee Energy Partners LLC, add on $5 million of term loan B debt and increase interest rates, according to an 8-K filed with the Securities and Exchange Commission Wednesday.

The applicable margin on borrowings was increased by 100 basis points until Quest Cherokee's total leverage ratio is less than 4 to 1.

UBS is the agent on the credit facility.

The waiver and amendment were executed on Tuesday.

Quest Cherokee is an independent energy company focused entirely on developing and expanding coalbed methane reserves in the Cherokee Basin in Kansas and Oklahoma. It is owned by Cherokee Energy Partners, a subsidiary of ArcLight Energy Partners, and Quest Resource Corp.

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