8-KMaterial AgreementsFinancial EventsExhibits & Filings

EQT Corp 8-K Report, Material Agreement (Nov 9, 2022)

Filed November 9, 2022For Securities:EQT

Summary

EQT Corporation (EQT) has announced a new $1.25 billion unsecured term loan credit agreement, effective November 9, 2022. This facility is primarily intended to finance a portion of the cash consideration for its previously announced acquisition of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC. The loan can be drawn in a single tranche and matures two years after the funding date. Interest rates will vary based on the loan type (Base Rate or SOFR Rate) and EQT's credit ratings, with margins ranging from 0 to 225 basis points above the respective benchmark rates. The agreement includes customary covenants and restrictions. Notably, it limits the incurrence of liens and debt by certain subsidiaries, imposes a maximum consolidated debt to total capital ratio of 65%, and restricts changes to EQT's business and asset sales. This financing provides EQT with significant capital to execute its strategic acquisition, demonstrating its commitment to growth in the Appalachian Basin.

Key Highlights

  • 1EQT Corp secured a $1.25 billion unsecured term loan facility on November 9, 2022.
  • 2The primary purpose of the loan is to fund the acquisition of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC.
  • 3The term loan has a maturity of two years from the funding date.
  • 4Borrowings can be either Base Rate Loans or Term SOFR Rate Loans with variable interest rates tied to EQT's credit ratings.
  • 5The agreement allows for voluntary prepayments without penalty, though funding loss reimbursements may apply to SOFR loans.
  • 6Covenants include restrictions on liens, subsidiary debt, and a maximum consolidated debt to total capital ratio of 65%.
  • 7The filing incorporates the Credit Agreement as an exhibit, providing full details of the terms and conditions.

Frequently Asked Questions

The primary purpose of the $1.25 billion term loan credit agreement is to finance, in part, the cash consideration for EQT's previously announced acquisition of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC, as well as related fees and expenses.

The loan can be drawn as Base Rate Loans or Term SOFR Rate Loans. Base Rate Loans will accrue interest at a Base Rate plus a margin of 0 to 125 basis points. Term SOFR Rate Loans will accrue interest at the Term SOFR Rate plus a 10 basis point credit spread adjustment and a margin of 100 to 225 basis points. Both margins are determined based on EQT's then-current credit ratings.

Yes, the agreement includes several covenants. These restrict the ability of EQT and its subsidiaries to incur liens and certain debt, subject to exceptions. It also sets a maximum consolidated debt to total capital ratio of 65% for relevant entities and limits certain business changes and asset sales.

The term loan matures on the earlier of two years from the funding date or upon the acceleration of outstanding amounts under specific circumstances, such as termination of aggregate commitments or acceleration of total outstandings.