Kosmos Energy Ltd.
04/29/2024 | Press release | Distributed by Public on 04/29/2024 05:29
Material Agreement - Form 8-K
Item 1.01 Entry into a Material Definitive Agreement
On April 25, 2024, Kosmos Energy Ltd. (the "Company") amended and restated its existing commercial debt facility by entering into an amended and restated facility agreement (the "A&R RBL") and certain ancillary documents.
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 final maturity date to December 31, 2029 (unless otherwise terminated pursuant to the A&R RBL);
•the extension of the amortization schedule such that amortization of principal is to commence with an initial payment on April 1, 2027 and then continue in equal amounts every six months thereafter until the maturity date;
•an increase in the interest margin by 0.25% or 0.5%, depending on the length of time that has passed from the date the A&R RBL was entered into, and removal of the credit adjustment spread from the margin calculation;
•an increase in the Loan Life Cover Ratio from 1.10x to 1.30x after September 30, 2027; and
•an increase in the Field Life Cover Ratio to 1.50x from 1.30x.
As a result of these amendments (i) total facility size under the A&R RBL has been increased from $1.25 billion to $1.35 billion and (ii) total commitments are approximately $1.2 billion, with the Company expecting to increase total commitments to $1.35 billion as additional lenders complete their final credit approval process.
The Company expects to incur approximately $18 million in fees and expenses (~1.5% of commitments) 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, 2024.
On April 25, 2024, and in connection with the amendment and restatement of the Company's commercial debt facility, the Company also amended its revolving credit facility agreement (the "RCF") reducing the borrowing capacity from $250.0 million to approximately $165 million. All of the commitments that were cancelled (either in full or in part) under the RCF were transferred to the A&R RBL as part of the amendment and restatement. There is no change to the final maturity date of the RCF which remains December 31, 2024.