Diversified Energy Upsizes Credit Line to $1B Borrowing Base, Cuts Margins 25bp

summarizeSummary

Diversified Energy's upstream unit amended its revolving credit facility to lift the borrowing base to $1 billion, cut interest margins by 25 basis points, and loosen restricted-payment covenants, with Truist replacing KeyBank as agent.

check_boxKey Events · Financing and Capital Events · DEC

• Borrowing Base Raised to $1 Billion

  The Fourth Amendment increases the borrowing base from $900 million to $1 billion, establishes aggregate elected commitments of $1 billion, and raises aggregate maximum credit amounts from $1.5 billion to $2.5 billion.

• Interest Margins Cut 25 Basis Points

  Borrowings now bear interest at SOFR plus 2.50% to 3.50%, or an alternate base rate plus 1.50% to 2.50%, with a further automatic 25bp reduction if more than $500 million of permitted unsecured debt is issued.

• Truist Replaces KeyBank as Agent

  Truist Bank becomes successor administrative agent and swing line lender; KeyBank exits as a lender and its outstanding loans are repaid, with $12,955,081.29 cash collateral posted for its existing letters of credit.

• Covenants Loosened for Payouts

  Restricted payments are permitted while pro forma trailing four-quarter Net Debt to EBITDAX is below 1.75 to 1.00 and liquidity exceeds 20% of the borrowing base; the transaction-cost add-back cap rises from 5% to 10% of EBITDAX.

auto_awesomeAnalysis · DEC · Energy & Transportation

Diversified's upstream subsidiary re-cut its revolving credit facility on better terms: the borrowing base rises from $900 million to $1 billion, aggregate elected commitments are set at $1 billion, and the maximum credit amount goes from $1.5 billion to $2.5 billion. Lenders also cut interest margins by 25 basis points to SOFR plus 2.50%-3.50%, with another 25bp step-down if the company issues more than $500 million of permitted unsecured debt. Truist takes over as administrative agent from KeyBank, which exits the lending group entirely. The covenant package loosens too: restricted payments are allowed while pro forma Net Debt to EBITDAX stays under 1.75x and liquidity exceeds 20% of the borrowing base, and the cap on transaction-cost add-backs doubles to 10% of EBITDAX. The trade-off is maturity: the facility now matures on the earlier of October 27, 2030 and 91 days before the 9.75% Nordic bonds come due, so if those bonds remain outstanding the line matures January 8, 2029. Separately, the company redeemed $62 million of ABS IX notes using facility borrowings, simplifying the capital structure ahead of the pending $1.8 billion Birch Permian acquisition.