At any time prior to February 1, 2027, the Company may on any one or more occasions redeem all or a part of the 2032 Notes, upon notice as provided in the Indenture, at a redemption price equal to 100% of the principal amount of the 2032 Notes redeemed, plus the relevant applicable premium, and accrued and unpaid interest, if any, to, but excluding, the date of redemption, subject to the rights of holders of the 2032 Notes on the relevant record date to receive interest due on the relevant interest payment date.
In addition, if (i) the GEPH Merger has not been completed on or prior to January 31, 2022 (the “Outside Date”), or (ii) on or prior to the Outside Date, (a) the Agreement and Plan of Merger governing the GEPH Merger has been terminated or (b) the Company has determined in its sole discretion that the consummation of the GEPH Merger cannot or is not reasonably likely to be satisfied on or prior to the Outside Date, the Company will be required to redeem all of the outstanding 2032 Notes at a redemption price equal to 100% of the principal amount of the 2032 Notes, plus accrued and unpaid interest from the date of initial issuance of such 2032 Notes, but not including the special mandatory redemption date.
In addition, if a “change of control event” (as defined in the Fourth Supplemental Indenture) occurs, holders of the 2032 Notes will have the option to require the Company to purchase all or any portion of their 2032 Notes at a purchase price equal to 101% of the principal amount of the 2032 Notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Indenture and the form of the 2032 Note, each of which is incorporated herein by reference into and is attached to this Current Report on Form 8-K as Exhibits 4.1, 4.2 and 4.3, respectively.
Term Loan Credit Agreement
On December 22, 2021, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The Term Loan Credit Agreement provides liquidity to the Company in addition to that provided by the Revolving Credit Agreement which currently provides for an elected borrowing base and commitments of $2 billion.
The Term Loan Credit Agreement provides for a $550 million secured term loan facility. The Company intends to use the net proceeds of the initial loans borrowed under the Term Loan Credit Agreement (the “Term Loans”) to fund a portion of the purchase price of the GEPH Merger and, pending consummation of the GEPH Merger, to temporarily reduce outstanding borrowings under the Revolving Credit Agreement. Commencing on March 31, 2022, the Term Loans will amortize in equal quarterly installments in aggregate quarterly amounts equal to 0.25% of the original principal amount of the Term Loans, subject to adjustment for any prepayments. If the GEPH Merger has not been completed on or prior to March 31, 2022, the Company will be required to prepay all of the outstanding Term Loans at par. The Term Loans mature on June 22, 2027.
The Term Loans are subject to varying rates of interest based on whether the Term Loan is a term benchmark loan or an alternate base rate loan. Term benchmark loans bear interest at the adjusted term SOFR rate (which includes a credit spread adjustment and is subject to a floor that is 0.50%) plus an applicable margin equal to 2.50%. Alternate base rate loans bear interest at the alternate base rate plus an applicable margin equal to 1.50%.
The Company’s obligations under the Term Loan Credit Agreement are guaranteed by each of the Company’s subsidiaries that guarantee the obligations under the Revolving Credit Agreement (collectively, the “Guarantors”) and are secured by liens on substantially all the assets of the Company and the Guarantors on a pari passu basis with the liens securing the obligations under the Revolving Credit Agreement.
The Term Loan Credit Agreement contains customary affirmative and negative covenants, including a financial ratio maintenance covenant. The Term Loan Credit Agreement also contains various customary events of default, the occurrence of which could result in the acceleration of all of our obligations thereunder.
The foregoing description of the Term Loan Credit Agreement is not complete and is in all respects subject to the actual provisions thereof, a copy of which has been filed as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated by reference herein.
