Enterra Energy (ENT) Completes Annual Renewal of Credit Facility
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Enterra Energy Trust's (NYSE: ENT) annual credit facility renewal process has been completed with its Bank Syndicate lenders, The Bank of Nova Scotia, HSBC Bank Canada and Union Bank of California. The credit facility revolving period has been renewed until June 25, 2010 and has a further one year term out provision beyond that.
The interest rate on the renewed credit facilities is Bankers Acceptance or LIBOR rate plus 3.00%. The actual rate will be determined quarterly according to a grid based on the ratio of bank debt to cash flow. As this ratio is currently less than 1.00 to 1.00, the lowest interest rate of the grid currently applies. The interest rate on the senior facility is estimated to be 3.7% effective June 2009.
Under the terms of the renewed credit facility, the Trust must maintain an interest coverage ratio of more than 3.00 to 1.00 with no other restrictions or covenants on the use of cash flows. The interest coverage ratio as at March 31, 2009 was 7.19 to 1.00 which is well above the minimum requirement.
The second-lien facility, which had been in place but was never drawn, has been terminated at Enterra's request.
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