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Memorial Resource Development gets $2 billion five-year revolver
By Angela McDaniels
Tacoma, Wash., June 24 – Memorial Resource Development Corp. entered into a $2 billion five-year secured revolving credit facility with an initial borrowing base of $725 million on June 18, according to an 8-K filing with the Securities and Exchange Commission.
The interest rate is Libor plus 150 basis points to 250 bps. The commitment fee ranges from 37.5 bps to 50 bps. Both depend on the total commitment usage.
Bank of America, NA is the administrative agent. Citibank, NA is the syndication agent. JPMorgan Chase Bank, NA, BMO Harris Bank, NA, Comerica Bank, Credit Agricole Corporate and Investment Bank, Natixis, Union Bank, NA and Wells Fargo Bank, NA are the co-documentation agents.
The borrowing base is redetermined semiannually based on the estimated oil, natural gas liquids and natural gas reserves of the company and its subsidiaries.
Borrowings are secured by liens on substantially all of the company’s properties, but in any event, not less than 80% of the total value of the company’s oil and natural gas properties and all other property pledged as collateral.
The credit agreement requires the company to maintain a ratio of consolidated EBITDAX to consolidated net interest expense of at least 2.5 to 1.0 and a ratio of consolidated current assets to consolidated current liabilities of at least 1.0 to 1.0.
The company plans to use borrowings under the revolver and a portion of the proceeds of its initial public offering to help fund the acquisition of some assets and to repay borrowings under subsidiary WildHorse Resources, LLC's existing credit agreements.
The company sold $408.5 million of common stock in its IPO for $382.1 million of net proceeds. Proceeds will also be used to redeem its 10%/10¾% senior PIK toggle notes due 2018.
Memorial Resource Development is a natural gas and oil company based in Houston.
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