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Falcon Minerals secures up to $500 million revolving credit facility
By Sarah Lizee
Olympia, Wash., Aug. 29 – Falcon Minerals Corp. subsidiary Falcon Minerals Operating Partnership, LP entered into a credit facility on Aug. 23 with Citibank, NA as administrative agent, providing for up to $500 million of revolving borrowings, according to an 8-K filing with the Securities and Exchange Commission.
The revolver matures in five years and has an initial $115 million borrowing base. The next scheduled redetermination of the borrowing base is on April 1, 2019.
Borrowings bear interest at Libor plus a margin that ranges from 200 basis points to 300 bps, and the commitment fee ranges from 37.5 bps to 50 bps, both based on use.
As previously reported, Falcon entered into a commitment letter for the revolver in June. The debt commitment was made in connection with the company’s definitive agreement to acquire the assets of Royal Resources from Blackstone Energy Partners and Blackstone Capital Partners.
At closing, $38 million was drawn under the credit agreement to fund a portion of the purchase price of the acquisition.
Financial covenants under the facility include a consolidated total net leverage ratio that may not exceed 4 to 1 and a current ratio that may not be less than 1 to 1. Both covenants will be calculated on a consolidated basis for each consecutive four fiscal quarter periods, beginning with the first full fiscal quarter ending on Dec. 31.
Citigroup Global Markets Inc. is the lead arranger and bookrunner.
Falcon Minerals owns mineral, royalty and over-riding royalty interests covering 251,000 gross unit acres in the Eagle Ford and Austin Chalk shales in Texas.
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