- Athabasca Oil Corp. (ATH) has issued US$350 million of senior secured notes and entered into a $110 million reserve-based credit facility
- The senior secured second lien notes (SLNs) have a coupon rate of 9.75 per cent and a five-year term
- Net proceeds from the notes offering along with cash on hand will be used to redeem the company’s existing US$450 million SLNs
- Athabasca Oil Corp is an energy company focused on the exploration, development, and production of light oil and liquids-rich natural gas
- Athabasca Oil Corporation (ATH) is down 4.545 per cent and is trading at $1.05 per share at 3:25 p.m. ET
Athabasca Oil Corporation (ATH) has issued US$350 million of senior secured notes and entered into a $110 million credit facility.
Athabasca intends to position itself as a low leveraged company that will generate significant free cash flow through its low decline, oil-weighted asset base.
The senior secured second lien notes (SLNs) have a coupon rate of 9.75 per cent and a five-year term. The notes allow Athabasca to reduce debt in the near term by using 75 per cent of free cash flow semi-annually to retire notes at 105 per cent of face value.
The notes offering includes the issuance of 79.4 million warrants with a strike price of $0.9441 per warrant and a cashless exercise feature that reduces future equity dilution by issuing new common shares for the in-the-money value of the warrant.
Net proceeds from the notes offering along with cash on hand will be used to redeem the company’s existing US$450 million senior second lien notes (SLN).
The reserve-based credit facility unlocks the remaining $46 million of restricted cash that was securing letters of credit for transportation agreements.
Athabasca is targeting to be in a net cash position in 2023 as it implements further debt reductions in the current commodity price environment.
The company’s portfolio of thermal and light oil assets creates strong free cash flow generation and position it competitively in the market.
Athabasca Oil Corp is an energy company focused on the exploration, development, and production of light oil and liquids-rich natural gas.
Athabasca Oil Corporation (ATH) is down 4.545 per cent and is trading at $1.05 per share at 3:25 p.m. ET.