Triangle USA closes on $60 million facility with optional term loans

By Marisa Wong

Madison, Wis., July 2 – Triangle Petroleum Corp.’s wholly owned subsidiary, Triangle USA Petroleum Corp., entered into a second-lien credit agreement on June 27 with Wells Fargo Energy Capital, Inc. as administrative agent.

The credit agreement provides for a $60 million second-priority secured credit facility, with optional additional term loans for up to $40 million, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings bear interest at Libor plus 700 basis points.

All borrowings mature on April 16, 2019.

The company may prepay borrowings at any time without premium or penalty if the prepayment is made prior to the first anniversary of the closing date. Prepayments made on or after the first anniversary of the closing date but before the second anniversary are subject to a 2% premium, and prepayments made on or after the second anniversary but before the third anniversary are subject to a 1% premium. No premium will apply to prepayments made on or after the third anniversary of the closing date.

In the event of the sale of permitted notes by Triangle USA, a mandatory prepayment of outstanding borrowings is required in an amount equal to the net proceeds from that sale.

The credit agreement also contains various covenants and restrictive provisions.

The credit agreement provides that as of the end of each fiscal quarter, Triangle USA must have an asset coverage ratio of at least 1.5 to 1.0 and a ratio of consolidated debt to consolidated EBITDAX of no greater than 4.5 to 1.0. The company must also maintain, as of the end of each fiscal quarter, a ratio of consolidated current assets to consolidated current liabilities of at least 1.0 to 1.0.

The facility is collateralized by a second lien on some of Triangle USA’s assets, including at least 80% of the adjusted engineered value of its oil and gas interests evaluated in determining the borrowing base for the subsidiary’s first-lien revolving credit facility and all of its personal property.

The oil and gas exploration company is based in Denver.

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