Rosetta Resources reveals details on expanded $600 million revolver

By Jennifer Chiou

New York, April 15 - Rosetta Resources Inc. announced the details on its previously amended and restated senior revolving credit agreement, which was expanded to a maximum credit amount of $600 million, up from $400 million.

Borrowings bear interest at Libor plus 225 basis points to 300 bps.

Debt on the facility is collateralized by perfected first-priority liens and security interests on substantially all of the company's assets, including a mortgage lien on oil and natural gas properties having at least 80% of the pretax SEC PV-10 reserve value, a guaranty by all of the company's domestic subsidiaries and a pledge of 100% of the membership interests of domestic subsidiaries.

Financial covenants include a minimum current ratio of not less than 1.0 to 1.0 as of the end of each fiscal quarter and a maximum leverage ratio of not greater than 3.5 to 1.0, calculated at the end of each fiscal quarter for the four fiscal quarters then ended.

Other covenants limit dividends and other restricted payments.

BNP Paribas was the administrative agent.

Rosetta previously said the maturity date of the agreement has been extended by more than two years to July 1, 2012 from April 5, 2010. The borrowing base under the amended and restated agreement has been reset to $375 million from $400 million.

The company also amended and extended its second-lien term loan maturity to Oct. 2, 2012 from July 7, 2010. The amount outstanding under the second-lien term loan remains at $75 million.

A 30-day accordion is in place, however, that will accommodate a select number of investors to come in after the close, which would result in a total second-lien raise of $100 million.

Borrowings under the second-lien term loan bear interest at Libor plus 850 bps, with a floor of Libor plus 350 bps.

Covenants include a minimum asset coverage ratio of not less than 1.5 to 1.0 and a maximum leverage ratio of not more than 4.0 to 1.0, calculated at the end of each fiscal quarter for the four fiscal quarters then ended, measured quarterly.

Rosetta is an independent oil and gas company based in Houston.

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