Lonestar inks forbearance on 11¼% notes, amends loan forbearance

By Taylor Fox

New York, Aug. 3 – Lonestar Resources US Inc. entered into a forbearance agreement on July 31 with certain holders of its outstanding 11¼% senior notes due 2023, according to an 8-K filing with the Securities and Exchange Commission.

On July 31, Lonestar and certain of its subsidiaries also entered into an amendment with respect to the forbearance agreement with the lenders under its credit agreement with Citibank, NA as administrative agent, under which the lenders agreed to extend the term until Aug. 21.

As previously reported, Lonestar elected not to make its $14.1 million interest payment due July 1 on the notes in order to evaluate certain financial alternatives.

Failure to make the interest payment on July 1 and failure to make the interest payment within 30 days after it was due constitutes and event of default under the indenture.

Under the forbearance agreements, the forbearing holders have agreed to temporarily forbear from the exercise of any rights or remedies until the event of default under the indenture.

The lenders under the credit facility agreed to refrain from exercising their rights and remedies under the credit facility and related loan documents regarding some defaults, including Lonestar’s failure to make the interest payment on time, until July 31.

Lonestar is a Fort Worth-based oil and natural gas company.

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