-
Issuing $109 Million Of 12.5% Senior Secured Second Lien Term Loans;
-
Repurchasing $252 Million Of Unsecured Notes For $109 Million;
-
Utilizing Full Second Lien Debt Capacity;
-
Preserving $125 Million Of Junior Lien Debt Capacity; and
-
Inclusive Of Previously Announced Transactions, Reducing Senior
Unsecured Notes By $828 Million And Total Debt By $413 Million
EXCO Resources, Inc. (NYSE:XCO) (“EXCO” or the “Company”) today
announced that it has entered into additional transactions (the
“Additional Transactions”) as the Company continues to enhance its
balance sheet as part of its ongoing strategic improvement plan
(“Strategic Plan”).
EXCO has entered into agreements with certain unsecured noteholders (the
“Noteholders”) pursuant to which the Noteholders have agreed to become
additional lenders for an aggregate amount of $109 million under the
Senior Secured Second Lien Term Loan entered into by EXCO on October 19,
2015 (the “Exchange Term Loan”) in exchange for the Company repurchasing
$252 million of the Noteholders’ senior unsecured notes at an average
price of 43% of principal amount. EXCO had previously exchanged senior
unsecured notes at an average price of 51% of principal amount.
The Exchange Term Loan bears interest at a rate of 12.50% per annum and
has a five-year maturity. EXCO and the Noteholders entered into
agreements to repurchase approximately $175 million of its 7.50% Senior
Unsecured Notes due 2018 (47% of the $374 million outstanding) and
approximately $76 million of its 8.50% Senior Unsecured Notes due 2022
(26% of the $299 million outstanding). After the closing of the
Transactions, EXCO will have $199 million and $223 million,
respectively, of the 7.50% and 8.50% Senior Unsecured Notes outstanding.
The Transactions further demonstrate EXCO’s focus on enhancing its
balance sheet. On October 26, 2015, EXCO closed on a series of
transactions (the “October 26th Transactions”) that enhanced
the Company’s liquidity and reduced debt that included:
-
Issuing $591 million of 12.5% Senior Secured Second Lien Term Loans;
-
Repurchasing $577 million of Unsecured Notes for $291 million; and
-
Amending the Credit Agreement.
EXCO anticipates that the Additional Transactions will further
strengthen the Company’s financial position and, when combined with the
October 26th Transactions, will significantly increase its
financial flexibility to implement its Strategic Plan by:
-
Reducing total debt by $413 million, or 27%;
-
Maintaining $125 million of junior lien debt capacity for future
exchanges;
-
Reducing the principal amount of outstanding senior unsecured notes by
$828 million, or 66%;
-
Reducing the nearest unsecured debt maturity, due in 2018, by $551
million, or 73%;
-
Extending weighted average debt maturity from 3.6 to 4.8 years,
representing a 33% improvement; and
-
Improving forward cash flow by $304 million.
Tables 1, 2 and 3 illustrate the pro forma impact of the October 26th
Transactions and the pro forma as adjusted impact of the Additional
Transactions if such transactions were completed on September 30, 2015.
Table 1: Capitalization Pro Forma for October 26th
Transactions and Pro Forma As Adjusted for the Additional Transactions
September
30, 2015; mixed measures
|
Factors
|
|
|
Unit
|
|
|
Actual
9/30/15
|
|
|
Pro Forma
9/30/15
|
|
|
Pro Forma
As
Adjusted
9/30/15
|
|
|
Delta To
Actual
|
|
|
% Delta To
Actual
|
|
|
|
|
|
|
|
a
|
|
|
b
|
|
|
c
|
|
|
c-a
|
|
|
(c-a)/a
|
|
Cash And Restricted Cash
|
|
|
$MM
|
|
|
42
|
|
|
42
|
|
|
42
|
|
|
0
|
|
|
0
|
|
Credit Agreement (1)
|
|
|
$MM
|
|
|
300
|
|
|
15
|
|
|
15
|
|
|
(285)
|
|
|
(95)
|
|
2nd Lien Term Loans
|
|
|
$MM
|
|
|
0
|
|
|
591
|
|
|
700
|
|
|
700
|
|
|
N/M
|
|
2018 Senior Notes (2)
|
|
|
$MM
|
|
|
750
|
|
|
374
|
|
|
199
|
|
|
(551)
|
|
|
(73)
|
|
2022 Senior Notes
|
|
|
$MM
|
|
|
500
|
|
|
299
|
|
|
223
|
|
|
(277)
|
|
|
(55)
|
|
Total Senior Notes
|
|
|
$MM
|
|
|
1,250
|
|
|
673
|
|
|
422
|
|
|
(828)
|
|
|
(66)
|
|
Total Debt
|
|
|
$MM
|
|
|
1,550
|
|
|
1,280
|
|
|
1,137
|
|
|
(413)
|
|
|
(27)
|
|
Net Debt
|
|
|
$MM
|
|
|
1,508
|
|
|
1,238
|
|
|
1,095
|
|
|
(413)
|
|
|
(27)
|
|
Weighted Average Debt Maturity (3)
|
|
|
Years
|
|
|
3.6
|
|
|
4.7
|
|
|
4.8
|
|
|
1.2
|
|
|
33
|
|
(1)
|
|
Estimated transaction fees funded by Credit Agreement borrowings.
|
|
(2)
|
|
Excludes unamortized discount.
|
|
(3)
|
|
For purposes of calculation, utilized six month duration for Credit
Agreement.
|
|
|
|
|
|
|
|
|
Table 2: Estimated Change in Future Cash Flow (“CF”) Pro Forma As
Adjusted for the Additional Transactions
15-22; $MM
|
Factors
|
|
|
Time
Period
|
|
|
Change in
Pro
Forma As
Adjusted
Future
CF
|
|
Reduction In Debt Principal Repayment
|
|
|
One Time
|
|
|
413
|
|
Reduction In Unsecured Notes Interest Expense
|
|
|
15-22
|
|
|
284
|
|
Addition Of Exchange 2nd Lien Interest Expense
|
|
|
15-20
|
|
|
(250)
|
|
Addition Of Estimated Transaction Fees
|
|
|
One Time
|
|
|
(15)
|
|
Addition Of Fairfax 2nd Lien Interest Expense Versus
Credit Agreement Interest Expense
|
|
|
15-20
|
|
|
(128)
|
|
Change In Future Cash Flow
|
|
|
15-22
|
|
|
304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3: Junior Lien Debt Capacity Pro Forma As Adjusted for the
Additional Transactions
September 30, 2015; $MM
|
Factors
|
|
|
Unit
|
|
|
Pro Forma
As
Adjusted
9/30/15
|
|
Total Secured Debt Capacity
|
|
|
$MM
|
|
|
1,200
|
|
Credit Agreement Borrowing Base
|
|
|
$MM
|
|
|
(375)
|
|
Fairfax 2nd Lien Term Loan
|
|
|
$MM
|
|
|
(300)
|
|
Exchange 2nd Lien Term Loan
|
|
|
$MM
|
|
|
(400)
|
|
Remaining Junior Lien Capacity
|
|
|
$MM
|
|
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse Securities (USA) LLC acted as exclusive restructuring
advisor to the Company.
The transactions are expected to close on November 4, 2015, subject to
the satisfaction or waiver of customary closing conditions, and the
senior unsecured notes repurchased will be cancelled by the trustee
following customary settlement procedures.
Additional information about the transactions will be available in a
Form 8-K to be filed by the Company in connection with the transactions
described above.
About EXCO
EXCO Resources, Inc. is an oil and natural gas exploration,
exploitation, acquisition, development and production company
headquartered in Dallas, Texas with principal operations in Texas, North
Louisiana and Appalachia.
Additional information about EXCO Resources, Inc. may be obtained by
contacting Chris Peracchi, EXCO’s Vice President of Finance and Investor
Relations, and Treasurer, at EXCO’s headquarters, 12377 Merit Drive,
Suite 1700, Dallas, TX 75251, telephone number (214) 368-2084, or by
visiting EXCO’s website at www.excoresources.com.
EXCO’s SEC filings and press releases can be found under the Investor
Relations tab.
Forward-Looking Statements
This release may contain forward-looking statements relating to future
financial results, business expectations and business transactions.
Actual results may differ materially from those predicted as a result of
factors over which EXCO has no control. Such factors include, but are
not limited to: the closing of the transactions described herein,
continued volatility in the oil and gas markets, the estimates of
reserves, commodity price changes, regulatory changes and general
economic conditions. These risk factors are included in EXCO’s reports
on file with the SEC. Except as required by applicable law, EXCO
undertakes no obligation to publicly update or revise any
forward-looking statements.
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