Specifically, the senior note maturities have been adjusted as follows:
- the senior notes maturing on March 16, 2020, May 29, 2020 and December 2, 2020 will be extended to November 30, 2021;
- the senior note maturing on November 30, 2021 will remain the same;
- the senior notes maturing on December 2, 2022 and December 2, 2025 will now mature on November 30, 2021; and
- if the end date of the revolving period on the syndicated credit facility is accelerated to April 1, 2021, as described below, then the senior notes maturities will also be accelerated to that date.
Given the current fall in oil prices and other market factors, the noteholders have also agreed in principle to amend the Company’s Senior debt and Total debt to Adjusted EBITDA covenants as outlined below, subject to the approval of members of the syndicated bank facility:
- for the period January 1, 2020 to June 30, 2020, the maximum Senior Debt to Adjusted EBITDA ratio will be less than or equal to 3.5:1;
- for the period July 1, 2020 to September 30, 2020, the maximum for both the Senior Debt and Total Debt to Adjusted EBITDA ratios will be less than or equal to 4.1:1; and
- for the period October 1, 2020 to June 30, 2021, the maximum for both the Senior Debt and Total Debt to Adjusted EBITDA ratios will be less than or equal to 6:1.
The Company has also reached an agreement with its building landlord on renewed lease terms for its Calgary office space. The effective date of these terms is February 1, 2020. The concessions are:
- lease payments will total $0.833 million per month, net of sub-leases, from February 2020 to January 2025 ($10 million on an annualized basis); and
- the building landlord has agreed to indemnify the Company on all existing subleases.
The implementation of the agreement reached with noteholders is subject to the execution of definitive documentation by March 31, 2020. If execution of the definitive documentation is not completed by March 31, 2020, then the senior note originally maturing on March 16, 2020 will mature on April 7, 2020. The agreement with the building landlord requires the execution of definitive documentation by March 31, 2020 and is subject to certain consents.
The Company anticipates releasing our 2019 year-end financial statements once all the required approvals have been obtained and definitive documentation executed.