Rex Energy amends credit agreement’s provisions, leverage covenant

By Jennifer Chiou

New York, Dec. 23 – Rex Energy Corp. entered into on Dec. 16 an amendment to its credit agreement with Royal Bank of Canada as administrative agent, modifying certain provisions to, among other things, change the leverage covenant, according to an 8-K filing with the Securities and Exchange Commission.

The leverage covenant now reflects a new ratio of net senior secured debt to EBITDAX of no greater than 1.75 to 1.00 measured on a trailing four-quarter basis, effective for fiscal quarters ending Dec. 31, 2014 through June 30, 2016. After that, it will revert to a ratio of total net debt/ EBITDAX of no greater than 4.25 to 1.00 measured on a trailing four-quarters basis, the filing stated.

The amendment also adds the defined term net senior secured debt, which means, at any date, the sum of (a) the total revolving credit exposures of all lenders, plus (b) the aggregate principal amount of debt of the company and its consolidated subsidiaries on that date that is secured by a lien on any asset or property of the company or any consolidated subsidiary, minus (c) all unrestricted cash and cash equivalents of the company and its consolidated subsidiaries.

The changes also involve removal of the former defined term total debt and replacing it with the defined term total net debt, which modifies the former concept of total debt by enabling the company to exclude from the calculation of total net debt all unrestricted cash and cash equivalents of the company and its consolidated subsidiaries on the applicable measurement date.

KeyBank NA is the syndication agent, and SunTrust Bank is the documentation agent.

State College, Pa.-based Rex is an independent oil and gas exploration and production company operating in the Appalachian and Illinois Basins.

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