| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 24, 2023, Devon Energy Corporation (the “Company”) entered into an amended and restated credit agreement (the “Credit Agreement”) among the Company, as the borrower, each lender from time to time party thereto (collectively, the “Lenders”), each letter of credit issuer from time to time party thereto and Bank of America, N.A., as administrative agent and swing line lender, providing for a $3.0 billion revolving credit facility. The Credit Agreement amended, restated and superseded in its entirety the Company’s prior credit agreement, dated as of October 5, 2018, among the Company, each lender and letter of credit issuer party thereto and Bank of America, N.A., as administrative agent and swing line lender.
The credit facility under the Credit Agreement may be increased by an aggregate amount of $750 million in revolving commitments by adding to the Credit Agreement one or more additional Lenders or by allowing one or more Lenders to increase their respective commitments, in each case, under certain conditions. The Credit Agreement provides that its proceeds may be used for the Company’s and its subsidiaries’ general corporate purposes. Interest rates on borrowings under the Credit Agreement are determined based on the applicable loan type and a pricing grid set forth in the Credit Agreement and vary according to the credit ratings of the Company. The Credit Agreement matures on March 24, 2028, which date may be extended for up to three additional one-year periods at the request of the Company (subject to the agreement of Lenders having commitments representing more than 50% of the aggregate commitments of all Lenders under the Credit Agreement). The Credit Agreement contains sub-limits of $300 million for the issuance of letters of credit and $50 million for swing line loans.
The Credit Agreement contains customary representations and warranties and customary covenants of the Company and certain restricted subsidiaries of the Company, including, among others, limitations on the creation of liens, limitations on mergers and other fundamental changes and restrictions on the incurrence of indebtedness by restricted subsidiaries. The Company has agreed to maintain a ratio of consolidated funded indebtedness to consolidated total capitalization of no greater than 65%, measured at the end of each fiscal quarter of the Company and calculated as set forth in the Credit Agreement. Upon the occurrence of certain events of default, the Company’s obligations under the Credit Agreement may be accelerated. Such events of default include payment defaults, breach of covenant defaults, certain change of control events, certain cross defaults under other indebtedness obligations and other customary default triggers.
The above description of the material terms and conditions of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto.
Relationships
Certain of the Lenders and their respective affiliates have, from time to time, performed, and may in the future perform, various banking and financial services for the Company and its affiliates, for which they may receive customary fees and expenses.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is hereby incorporated into this Item 2.03 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
