Swift Energy emerges from bankruptcy with $320 million exit facility

By Caroline Salls

Pittsburgh, April 25 – Swift Energy Co. completed its financial restructuring and emerged from Chapter 11 bankruptcy after completing all required actions and satisfying the remaining conditions to its plan of reorganization, according to a company news release.

The plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on March 31. According to a notice filed with the court, the plan effective date was April 22.

In conjunction with its emergence, Swift said it closed on a new $320 million senior secured credit facility and a sale of some assets in Central Louisiana to Texegy LLC.

JPMorgan Chase Bank, NA is the administrative agent for the exit facility, as well as the lead arranger and bookrunner.

Interest will depend on the borrowing base, with interest ranging from Libor plus 300 basis points 700 bps for Eurodollar loans and from the Base rate plus 200 bps to 600 bps for Base rate loans.

The exit facility will mature on April 22, 2019.

“Through this restructuring, we have developed a more disciplined, efficient organization and greatly improved our balance sheet,” chief executive officer Terry Swift said in the release.

“Our noteholders’ continued support and willingness to invest in our company were critical to our emergence as was the agreement by our reserve-based lenders to provide the financing we needed to exit Chapter 11 and operate our business into the future.

“With our emergence comes a new era for Swift, and while we are excited to have this process behind us, we must continue in our efforts to further improve our operations and maximize the value of our assets.

As previously reported, the reorganization implements a restructuring agreement that was reached with an informal group of senior noteholders before the company filed for bankruptcy.

Plan terms

Treatment of creditors will include the following:

• RBL credit agreement secured claims will be paid in full in cash. Cash for the refinancing will come from a new $320 million reserve-based exit loan to be provided by Swift’s bank group. This loan will also fund other obligations under the plan and the company’s ongoing operations;

• Other secured claims will be reinstated or holders will be paid in full in cash or receive the collateral securing the claims;

• The $75 million DIP facility will be converted to equity;

• Holders of senior notes and rejection claims will receive a share of a distribution equal to 88.5% of new common stock;

• General unsecured claims will be either reinstated or paid in full in cash;

• Intercompany claims and intercompany interests will be reinstated; and

• Holders of equity interests will receive new equity and warrants if they opted to grant voluntary plan releases and no distribution if they did not grant the releases. The new equity will represent 4% of the common stock and the warrants will represent 30%.

The plan will cut Swift’s debt by $905 million.

Swift has been advised throughout this process by the law firm of Jones Day, investment bank Lazard, and financial adviser Alvarez & Marsal.

Swift Energy is a Houston-based developer, explorer, acquirer and operator of oil and gas properties, with a focus on oil and natural gas reserves onshore in Texas and Louisiana and in the inland waters of Louisiana. It filed for bankruptcy on Dec. 31. The Chapter 11 case number is 15-12670.

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