Quest Energy amends loan, waiving defaults related to questionable transfer of funds

By Sara Rosenberg

New York, Nov. 7 - Quest Energy Partners LP amended its credit facility, waiving any potential non-compliance related to the questionable transfer of about $10 million of funds from the Quest entities to an entity controlled by the company's former chief executive officer, according to an 8-K filed with the Securities and Exchange Commission on Friday.

In addition, the amendment increased pricing, with the revolver rate going up to Libor plus 400 basis points and the second-lien term loan rate going up to Libor plus 900 bps with a 3.5% Libor floor.

Furthermore, the company's second-lien loan was amended to extend its maturity to Sept. 30, 2009 from Jan. 11, 2009.

The amended second-lien loan limits fiscal 2009 capital expenditures to $30 million and, for as long as the second-lien is outstanding, limits the maximum quarterly distribution the company may declare and pay on its outstanding common units to $0.40 per common unit.

The amendments also require the company to make quarterly principal payments of $3.8 million beginning Nov. 15 on the second lien.

Lenders were paid a 25 bps amendment fee.

The amendment was completed on Oct. 28.

RBC is the administrative agent on the deal.

The company also said on Friday that earlier in the week, lenders reviewed and affirmed the existing borrowing base under the revolver of $190 million. With the reconfirmation of the borrowing base, the company has $7 million of availability under the revolver.

Oklahoma City-based Quest Energy Partners was formed by Quest Resource Corp. to acquire, exploit and develop natural gas and oil properties and related assets.

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