SandRidge enhances liquidity

SandRidge Energy Inc. (NYSE: SD) has entered into transactions that will increase the company’s current liquidity to $1.4 billion, including a revised revolving bank credit facility containing leverage covenants that are less restrictive than under its current credit facility and a private offering of $1.25 billion of senior secured second lien notes.

The company will, concurrently with the issuance of its second lien notes, revise its first lien credit facility, lowering its initial borrowing base availability from its current $900 million to $500 million, subject to maintenance of a first lien leverage ratio of not more than 2.0 times (senior first lien secured debt/ LTM pro forma EBITDA) and a minimum current ratio (including available borrowing capacity) of at least 1.0 times.  

The effectiveness of the revised revolving credit facility and issuance of the senior lien notes, which are mutually conditioned on each other, are expected to occur on June 10.

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