8-KLeadership ChangesMaterial AgreementsFinancial Events+4

EXPAND ENERGY Corp 8-K Report, Material Agreement (Feb 9, 2021)

Filed February 9, 2021For Securities:EXEEXEELEXEEWEXEEZ

Summary

EXPAND ENERGY Corp. (EXE) has emerged from Chapter 11 bankruptcy following the consummation of its Plan of Reorganization. A significant aspect of this emergence is the establishment of a new $2.5 billion reserve-based Exit Credit Facility, which includes $1.75 billion in revolving Tranche A Loans and $0.22 billion in fully funded Tranche B Loans. This facility is secured by substantially all of the company's assets and includes financial covenants such as a first lien leverage ratio not exceeding 2.75 to 1.00. In conjunction with the bankruptcy exit, EXE also issued $1 billion in senior unsecured notes, comprising $500 million of 5.500% senior notes due 2026 and $500 million of 5.875% senior notes due 2029. The company has also issued various classes of warrants to former holders of its Second Lien and Unsecured Notes as part of the reorganization. All prior equity interests and most existing debt have been cancelled as part of the plan, marking a significant financial restructuring for the company.

Key Highlights

  • 1Established a new $2.5 billion reserve-based Exit Credit Facility with MUFG Bank, Ltd. as administrative agent.
  • 2Issued $1.75 billion in Tranche A revolving loans and $0.22 billion in Tranche B loans under the new credit facility.
  • 3Issued $1 billion in new senior unsecured notes: $500 million due 2026 and $500 million due 2029.
  • 4All previous equity interests were cancelled as part of the Chapter 11 Plan of Reorganization.
  • 5Various classes of warrants (Class A, B, and C) have been issued to former holders of Second Lien and Unsecured Notes.
  • 6The company has adopted a new governance structure with a seven-member Board of Directors and new executive officers.
  • 7The company has emerged from Chapter 11 bankruptcy proceedings.

Frequently Asked Questions

This 8-K filing announces that EXPAND ENERGY Corp. (EXE) has consummated its Plan of Reorganization and emerged from Chapter 11 bankruptcy. It details the key financial and operational changes resulting from this emergence, including the establishment of new credit facilities, issuance of new debt, and changes in corporate governance.

The new Exit Credit Facility has an initial borrowing base of $2.5 billion. It includes $1.75 billion in revolving Tranche A Loans maturing in 3 years and $0.22 billion in fully funded Tranche B Loans maturing in 4 years. Interest rates vary based on the ABR or LIBOR plus an applicable margin, with a LIBOR floor. The facility is secured by substantially all of the company's assets and includes financial covenants related to leverage and liquidity ratios.

As part of the Plan of Reorganization, all previously issued equity interests in the company were cancelled. Similarly, most outstanding debt, including various series of Senior Notes and the FLLO Term Loan Facility, were cancelled or terminated, with creditors receiving distributions in the form of new common stock, warrants, or cash as outlined in the plan.

The company has issued $1 billion in new senior unsecured notes: $500 million of 5.500% senior notes due 2026 and $500 million of 5.875% senior notes due 2029. These notes are guaranteed on a senior unsecured basis by certain subsidiaries.