Kosmos Energy Ltd.
05/10/2021 | Press release | Archived content
Material Event (Form 8-K)
Entry into a Material Definitive Agreement
On May 7, 2021, Kosmos Energy Ltd. (the 'Company') amended and restated its existing commercial debt facility (under which the Company's indirect subsidiaries, Kosmos Energy Finance International, Kosmos Energy Senegal and Kosmos Energy Mauritania, were the borrowers) by entering into an amended and restated facility agreement (the 'A&R RBL') and certain ancillary documents. The A&R RBL will be effective upon satisfaction of customary conditions.
The A&R RBL makes certain amendments to the terms of the existing amended and restated commercial debt facility, subject to certain conditions and exceptions, including without limitation:
| · | the extension of the maturity date to March 31, 2027 (unless otherwise terminated pursuant to the A&R RBL); |
| · | the extension of the amortization schedule such that amortization of principal is to commence on March 31, 2024 and continue in equal amounts every six months thereafter until the maturity date; |
| · | an increase in the interest margin by 0.5% (with the applicable interest margin for the next three years now being LIBOR + 3.75%); |
| · | the incorporation of a mechanism for two environmental, social and governance ('ESG') key performance indicators to impact the margin either positively or negatively based upon delivering emissions targets and achieving certain third party ESG ratings; |
| · | an increase in the Loan Life Coverage Ratio from 1.10x to 1.30x after March 31, 2024; and |
| · | the removal of Kosmos Energy Investments Senegal Limited, Kosmos Energy Senegal and Kosmos Energy Mauritania as borrowers, guarantors and pledged subsidiaries. |
As a result of these amendments, (i) total facility size under the A&R RBL has been decreased from $1.5 billion to $1.25 billion as of the date of effectiveness and (ii) total commitments are approximately $1.21 billion, with the Company expecting to increase total commitments to $1.25 billion in the second quarter of 2021 as additional lenders complete their final credit approval process.
The Company expects to incur approximately $15 million in fees and expenses associated with entering into the A&R RBL, which such fees and expenses are expected to be amortized over the term of the A&R RBL.
The A&R RBL contains other customary representations and warranties, covenants and informational undertakings, in each case, subject to certain exceptions and conditions. The A&R RBL also provides for certain customary events of default, including, among other things, payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of insolvency, judgment defaults, and repudiation or rescission of certain documents supporting the A&R RBL. If such an event of default occurs, the agents under such A&R RBL are entitled to take various actions, including the cancellation of any outstanding commitments, acceleration of amounts due thereunder and taking certain permitted enforcement actions under the ancillary security documents, subject in each case to the terms of the A&R RBL and such security documents.
The foregoing description of the A&R RBL is not complete and is qualified in its entirety by reference to the full text of the A&R RBL, a copy of which will be filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter-ended June 30, 2021.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosure required by this item is included in Item 1.01 above and is incorporated herein by reference.
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