Carrizo Oil & Gas amends loan to modify covenants to gain flexibility

By Sara Rosenberg

New York, April 22 - Carrizo Oil & Gas Inc. amended its secured credit facility, revising the leverage ratio and the definition of net debt, and adding a senior debt leverage ratio, according to a news release.

Under the amendment, the maximum total debt leverage ratio was increased to 4.25 to 1 in the second quarter of 2009, 4.50 to 1 in the third quarter of 2009, 4.75 to 1 in the fourth quarter of 2009, 4.75 to 1 in the first three quarters of 2010 and 4.25 to 1 in the fourth quarter of 2010. The ratio reverts back to 4.0 to 1 thereafter.

In addition, the definition of net debt in the leverage ratio was changed to exclude a portion of the company's convertible notes, starting at around $51.3 million for 2009, around $38.9 million for all of 2010, around $26 million for all of 2011 and around $12.7 million for the duration in 2012.

Also, a senior debt leverage ratio was added to the deal, with a maximum ratio of 2.25 to 1.

"We are pleased that our bank syndicate has provided this strong vote of confidence in our asset base and business strategy by relaxing these financial covenants through 2010. The amendment significantly improves our financial flexibility and removes much of the uncertainty surrounding our future ability to remain compliant with these financial covenants," said Paul Boling, vice president and chief financial officer, in the release.

Carrizo is a Houston-based energy company.

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