30th May 2022 10:31
(Alliance News) - Diversified Energy Co PLC on Monday said it closed an asset-backed securitisation of all its remaining unsecuritised upstream producing natural gas and oil Appalachia assets.
The Birmingham, Alabama-based oil & gas producer closed the ABS last Friday.
The amount of the ABS comes up to USD445 million with a fixed coupon of 5.78%.
The assets were previously pledged as collateral under Diversified Energy's revolving credit facility.
Next to closing the ABS, Diversified Energy received a redetermined borrowing base at USD300 million from its 16-member bank group, led by KeyBank National Association.
The company plans to use the proceeds to repay all outstanding borrowings under its revolving credit facility and for general corporate purposes.
This will result in liquidity of roughly USD500 million as of March 31.
The financing is linked to key performance indicators, including "certain" emissions reduction targets based on targets from its 2021 sustainability report, it said.
"We are pleased to close another fixed-rate, fully-amortising and liquidity-enhancing ABS, at a tighter spread to prevailing interest rates than our prior ABS notes despite a rising rate environment," Chief Executive Rusty Hutson said.
"We plan to remain active in the ABS market given the supportive commodity price backdrop, strong investor demand for seasoned-issuers like Diversified and our desire to transition long-term assets from our revolving credit facilities into low fixed-rate, fully-amortising notes."
Diversified Energy shares were trading 1.5% higher in London on Friday morning at 124.80 pence each.
By Abby Amoakuh; [email protected]
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