CALGARY, ALBERTA–(Marketwired – March 31, 2016) – Baytex Energy Corp. (“Baytex”) (TSX:BTE) (NYSE:BTE) announces amendments to its bank credit facilities that provide the company with increased financial flexibility.
The amendments include reducing our credit facilities to US$575 million (approximately C$750 million), granting our bank lending syndicate first priority security with respect to our assets and restructuring our financial covenants. These facilities are not borrowing base facilities and do not require annual or semi-annual reviews. There are no mandatory principal payments prior to maturity in June 2019 and the maturity date can be further extended with the consent of our bank lending syndicate. With this revised agreement, we expect to realize savings of approximately C$8 million in 2016 from lower interest expense and standby fees.
The following table summarizes the financial covenants contained in the amended credit agreement and our compliance therewith as at December 31, 2015.
|Ratio for the Quarter(s) ending:|
|Covenant Description||Position as at Dec. 31, 2015||March 31, 2016 to March 31, 2018||June 30, 2018 to Sept. 30, 2018||Dec. 31, 2018||Thereafter|
|Senior Secured Debt (1) to Bank EBITDA (2) (Maximum Ratio)||0.43:1.00||5.00:1.00||4.50:1.00||4.00:1.00||3.50:1.00|
|Interest Coverage (3) (Minimum Ratio)||6.11:1.00||1.25:1.00||1.50:1.00||1.75:1.00||2.00:1.00|
- “Senior Secured Debt” is defined as the principal amount of our bank loan and other secured obligations under the credit facilities. At December 31, 2015, our Senior Secured Debt totaled C$269 million.
- “Bank EBITDA” is calculated based on terms and conditions set out in the credit agreement which adjusts net income for interest expense, income taxes, certain non-cash items and acquisition and disposition activity. Bank EBITDA is calculated based on a trailing twelve month basis and was C$629 million for the twelve months ended December 31, 2015.
- “Interest Coverage” is computed as the ratio of Bank EBITDA to interest expense on our Senior Secured Debt and long-term notes. Interest expense for the trailing twelve months ended December 31, 2015 was C$103 million.
At December 31, 2015, our Senior Secured Debt to Bank EBITDA ratio was 0.43:1.00, our Interest Coverage ratio was 6.11:1.00 and we were 32% drawn on our amended credit facilities.
In addition to our credit facilities, we have unsecured U.S. dollar long-term notes of US$956 million with no material maturities until 2021 and unsecured Canadian dollar long-term notes of C$300 million that mature in 2022. These long-term notes contain no material financial maintenance covenants.
With these amendments to our bank credit facilities, we expect to have adequate liquidity and financial flexibility to execute our business plan. In addition, we are well positioned to benefit from an oil price recovery as our three core plays provide some of the strongest capital efficiencies in North America.