Hess enters up to $4 billion credit agreement with JPMorgan Chase

By Jennifer Chiou

New York, Jan. 27 – Hess Corp. entered into on Jan. 21 a five-year credit agreement with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filed with the Securities and Exchange Commission.

The agreement provides for an aggregate amount of up to $4 billion of borrowings, including up to $400 million of swingline loans, of which $285 million is committed as of the effective date, and up to $2 billion of letters of credit, of which $1 billion is committed as of Jan. 21.

There is a $1 billion accordion feature.

Borrowings will bear interest at Libor plus 90 basis points to 150 bps, depending on the credit rating of the company’s senior unsecured debt. There is a facility fee of 10 bps to 25 bps, which is also based on the debt rating.

The credit agreement expires on Jan. 21, 2020.

The new loan replaces the company’s existing $4 billion five-year credit agreement dated as of April 14, 2011.

The credit agreement includes a financial covenant limiting the ratio of total consolidated debt to total capitalization of the company and its consolidated subsidiaries to 0.65 to 1.00.

Wholly owned subsidiaries Hess Oil and Gas Holdings Inc., Hess International Holdings Ltd., Hess Capital Services LLC, Hess (Netherlands) Oil and Gas Holdings CV and Hess Overseas Finance Investments Centre Ltd. and additional subsidiaries as may be added as borrowing subsidiaries may borrow and request letters of credit up to the full amount of the commitment, with all extensions of credit being guaranteed by the company, the filing stated.

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Royal Bank of Scotland plc, Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc. acted as syndication agents.

The global energy company is based in New York City.

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