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Energy XXI Gulf Coast amendment removes prohibition on note prepayment
By Angela McDaniels
Tacoma, Wash., June 4 - Energy XXI (Bermuda) Ltd. subsidiary Energy XXI Gulf Coast, Inc. amended its first-lien credit agreement, according to an 8-K filing with the Securities and Exchange Commission.
The amendment contained provisions that facilitated Energy XXI Gulf Coast's acquisition of EPL Oil & Gas, Inc., including providing some of the financing for it.
The amendment also removed the prohibition on the prepayment, redemption or other refinancing of Energy XXI Gulf Coast's outstanding 9¼% senior notes due 2017, 7¾% senior notes due 2019, 7½% senior notes due 2021 and 6 7/8% senior notes due 2024 and any other permitted unsecured debt incurred by Energy XXI Gulf Coast. Instead, it established some quantitative liquidity conditions to making any such prepayment, redemption or other refinancing.
With the amendment, Energy XXI Gulf Coast retains the ability to further incur $1 billion of permitted unsecured debt, provided that it is restricted from borrowing 25% of the amount until the credit facility lenders otherwise provide or waive this limitation, and it can use the proceeds to prepay, redeem or refinance the notes.
The amendment also incorporates the concept of Energy XXI Gulf Coast's 6 7/8% senior notes due 2024 as senior unsecured debt generally permitted under the terms of the credit agreement (so that provisions under the credit agreement for those notes are commensurate with the provisions already existing for Energy XXI Gulf Coast's 9¼% notes, 7¾% notes and 7½% notes.
Under the amendment, the maturity date of the credit agreement will be accelerated to Aug. 15, 2017 if EPL's 8¼% notes due 2018 notes are not prepaid, redeemed or refinanced by that date.
Energy XXI Gulf Coast and EPL are both Houston-based oil and natural gas exploration and production companies.
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