Former Vanguard gives details on exit financing terms, unit issuance

By Caroline Salls

Pittsburgh, July 17 – Vanguard Natural Resources, Inc. provided details in an 8-K filed Wednesday with the Securities and Exchange Commission about its exit financing and stock issued as part of its emergence from Chapter 11 bankruptcy.

As previously reported, Vanguard’s plan of reorganization was confirmed on July 9 by the U.S. Bankruptcy Court for the Southern District of Texas and took effect on Tuesday.

Vanguard emerged from bankruptcy under the name Grizzly Energy, LLC.

According to the 8-K, Grizzly entered into a $65 million first-lien reserve-based credit facility and a $65 million second-out term loan A. The initial borrowing base under the RBL credit agreement is $65 million.

Citibank, NA is the administrative agent and issuing bank.

The RBL credit agreement will mature on July 16, 2022.

Until the maturity date, the term loan A will bear interest at a rate of the alternate Base rate plus 300 basis points or Libor plus 400 bps, and the revolving loans will bear interest based on borrowing base utilization percentage at a rate ranging from the alternate Base rate plus 200 bps to 300 bps or Libor plus 300 bps to 400 bps.

Grizzly has also entered into a $285 million term loan B credit agreement with agent Citibank.

The term loan B will mature on Jan. 16, 2023, and interest will accrue at the alternate Base rate plus 650 bps or Eurodollar plus 750 bps.

In addition, Grizzly issued, in accordance with the plan, 39.06 million series A preferred units and 75,000 series C common units to holders of revolving credit facility and secured swap claims.

A total of 5.98 million series A preferred units, 861,252 series B preferred units and 10,000 common units were issued to holders of term loan claims.

The company said 700,000 series A preferred units and 15,000 common units were issued to holders of senior notes claims.

As of the plan effective date, there were 100,000 common units, 45.74 million series A preferred units and 861,252 series B preferred units issued and outstanding.

Grizzly said it will “use commercially reasonable efforts to cause the units to continue to be quoted on either the OTCQB Venture Market or the OTCQX Best Market, which are each marketed by OTC Markets Group Inc., as soon as the applicable listing standards are satisfied or have been waived.”

Grizzly is a Houston-based oil and gas exploration and development company.

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