Crosstex amends credit agreement to decrease interest coverage ratio

By Jennifer Chiou

New York, Aug. 30 - Crosstex Energy, LP entered into on Aug. 28 an amendment to its credit agreement with Bank of America, NA as administrative agent and letter of credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The changes amend the credit agreement to, among other things, allow Crosstex to make additional investments in joint ventures and subsidiaries that are not guarantors of its obligations under the agreement and decrease the minimum consolidated interest coverage ratio to 2.25 to 1.0 for the fiscal quarters ending March 31, 2014, June 30, 2014, Sept. 30, 2014 and Dec. 31, 2014, with a minimum ratio of 2.50 to 1.0 for each fiscal quarter ending thereafter.

The amendment also increases the maximum permitted consolidated leverage ratio to 5.50 to 1.0 for the fiscal quarters ending March 31, 2014, June 30, 2014 and Sept. 30, 2014, with a maximum ratio of 5.25 to 1.0 for each fiscal quarter ending thereafter.

As of closing, the company has $60 million of outstanding borrowings and $62.3 million of outstanding letters of credit, leaving it with about $512.7 million available capacity.

Crosstex is a midstream natural gas company based in Dallas.

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