Each one in plain English, with the numbers worked through for a shareholder.
23 Sept 2009debt financing▼ BadMajor
With its first-lien borrowing base already cut to $199 million, Energy XXI amended its credit agreement to clear the way for a distressed debt exchange: swapping at least $311 million of its existing 10% Senior Notes for new 16% Second Lien Notes at a discount (up to $0.80 on the dollar), raising $50 million of fresh cash, and using $41 million of it to pay down bank debt - a real deleveraging move forced by tightening credit conditions during the financial crisis.
The next borrowing-base redetermination cut Energy XXI's revolving credit facility sharply, from $400 million to $240 million, as the 2008-2009 financial crisis and collapsing oil prices hit lender risk appetite - the company expected to end up fully drawn with only $61 million of cash on hand, a real tightening of its liquidity cushion.
Energy XXI's semi-annual borrowing-base redetermination kept its revolving credit facility at $400 million, with $280 million drawn and $388 million still available (excluding a $12 million slice Lehman Brothers had committed but, post-collapse, couldn't fund) plus $102 million cash on hand - comfortable liquidity heading into the financial crisis.
Energy XXI signed standard indemnification agreements with its directors and officers - founding leadership included CEO John D. Schiller Jr., Steve Weyel, CFO David West Griffin, William Colvin, Paul Davison, David M. Dunwoody and Hill Feinberg.
Energy XXI filed its Gulf Coast subsidiary's audited FY2008 financial statements as required under its 2007 senior notes indenture - another routine compliance filing.
Energy XXI filed its Gulf Coast subsidiary's routine Q1 2008 financial statements as required under the indenture for the $750 million of 10% senior notes it had issued in 2007 - a compliance filing, not a new capital raise.
