Archaea lifts revolving, term loan credit agreement to $1.1 billion

By Marisa Wong

Los Angeles, July 7 – Archaea Energy Inc. wholly owned indirect subsidiary Archaea Energy Operating LLC entered into a second amendment on June 30 to its revolving credit and term loan agreement dated Sept. 15, 2021 to increase total commitments by $630 million to $1.1 billion and provide for a $400 million senior secured term loan and a $700 million senior secured revolver, according to an 8-K filing with the Securities and Exchange Commission.

Comerica Bank is administrative agent.

The original credit agreement provided for a senior secured term loan with an initial commitment of $220 million and a senior secured revolver with an initial commitment of $250 million.

Previously, the administrative agent entered into a first amendment on June 1 to the credit agreement to make some benchmark replacement conforming changes after the occurrence of an early opt-in event to replace Libor with adjusted term SOFR.

Under the second amendment, the credit agreement was also modified to, among other things, permit the acquisition of all of the equity interests of NextGen Power Holdings LLC with debt proceeds; permit an unlimited amount of investments in pledged unlevered controlled joint ventures so long as the credit parties are in pro forma compliance after that investment; increase the investment baskets for other joint venture agreements and excluded subsidiaries; provide unlimited cash netting on the credit parties’ total leverage ratio; and provide grower baskets on the investments, indebtedness and liens covenants as a percentage of adjusted consolidated net tangible assets.

As of the date of the latest amendment, the borrower has $50 million of borrowings and about $23.8 million of letters of credit outstanding under the revolver and an outstanding principal balance of $400 million outstanding under the term loan.

Archaea is a Houston-based renewable natural gas producer.

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