LINN Energy sees borrowing base reduction

LINN Energy LLC (Nasdaq: LINE) has completed its Fall 2015 borrowing base redetermination and entered into key amendments that provide additional flexibility in the current market environment. Following the redetermination, LINN's maximum borrowing availability under its credit facility has been reduced to $3.6 billion and the borrowing base under the credit facility for Berry Petroleum Co. LLC has been reduced to $900 million, including $250 million of restricted cash previously posted as collateral with Berry's lenders. 

LINN’s lenders have also approved a potential combination of the LINN and Berry credit facilities under certain conditions, subject to a combined borrowing base of $4.05 billion. LINN currently has undrawn capacity of $790 million, assuming borrowings outstanding as of Sept. 30.

As part of the redetermination, LINN and Berry each entered into an amendment to their respective credit facilities. Among other items, the amendments include the ability to incur junior lien indebtedness, a reduction in the minimum interest coverage ratio, and an increased ability for LINN to divest assets which do not contribute to its borrowing base. 

Under the terms of the amendments, LINN and Berry may incur up to $4 billion and $500 million, respectively, of junior lien indebtedness, in each case subject to borrowing base reductions in certain circumstances. In addition, LINN’s minimum interest coverage ratio has been reduced from 2.5x to 2.0x through Dec. 31, 2016, increasing to 2.25x through June 30, 2017, and then returning to 2.5x on July 1, 2017.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...