Range Resources gets $4 billion restated reserve-based revolver

By Marisa Wong

Morgantown, W.Va., April 16 – Range Resources Corp. entered into an amended and restated revolving credit agreement on April 13 for a senior secured reserve-based revolving credit facility totaling up to $4 billion, with a $3 billion borrowing base and total lender commitments of $2 billion, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA, Merrill Lynch, Pierce, Fenner & Smith Inc. and RBC Capital Markets are joint lead arrangers with JPMorgan Chase Bank as bookrunner and administrative agent and Bank of America, NA and Royal Bank of Canada as co-syndication agents. Bank of Montreal, Capital One, NA, Canadian Imperial Bank of Commerce, New York Branch, Citibank, NA, Credit Agricole CIB, MUFG Union Bank, NA, U.S. Bank NA and Wells Fargo Bank, NA are co-documentation agents.

The new agreement matures on April 13, 2023.

The agreement provides for the issuance of up to $500 million of letters of credit.

The credit agreement is guaranteed by all of Range’s domestic subsidiaries. Upon receiving an investment-grade rating from either Moody’s Investors Service or S&P Global Ratings, Range may elect to release collateral securing the facility and forego adding future guarantors.

Borrowings will bear interest at Libor plus a margin ranging from 125 basis points to 225 bps. Upon obtaining an investment-grade rating, the margin will range from 112.5 bps to 175 bps.

The undrawn portion of the total commitments will be subject to a commitment fee ranging from 30 bps to 37.5 bps during a non-investment-grade period and from 15 bps to 30 bps during an investment-grade period.

During a non-investment-grade period, the applicable margin and commitment fee are based on borrowings relative to the then-effective borrowing base; whereas during an investment-grade period, the applicable margin and commitment fees are determined by the highest credit rating.

During a non-investment-grade period, the borrowing base will be redetermined by the lenders annually beginning May 1, 2019 and at some other times. Range and the lenders may each request one unscheduled borrowing base redetermination between each scheduled redetermination, as well as a redetermination in connection with a material acquisition. The borrowing base may be automatically reduced by some divestitures or upon cancellation of some hedging positions.

The credit agreement contains some financial covenants. Range must maintain

• During an investment-grade period if Range has both a senior unsecured debt rating from Moody’s of Baa3 or better and a long-term issuer rating from S&P of BBB- or better, a ratio of consolidated funded debt to consolidated EBITDAX less than or equal to 4.25 to 1.0;

• A ratio of consolidated current assets to consolidated current liabilities greater than or equal to 1.0 to 1.0;

• If an investment-grade period is not in effect or if Range does not have both a senior unsecured debt rating from Moody’s of Baa3 or better and a long-term issuer rating from S&P of BBB- or better, a ratio of the PV-9 of its oil and gas properties to consolidated funded debt greater than or equal to 1.50 to 1.00; and

• If an investment-grade period is not in effect or if Range does not have both a senior unsecured debt rating from Moody’s of Baa3 or better and a long-term issuer rating from S&P of BBB- or better, a ratio of consolidated EBITDAX to consolidated interest charges paid in cash of greater than or equal to 2.50 to 1.00.

Range Resources is an oil and natural gas producer based in Fort Worth.

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