Item 1.01. Entry into a Material Definitive Agreement.
On June 1, 2020, Gran Tierra Energy Inc. (the "Company"), Gran Tierra Energy
International Holdings Ltd., as borrower, The Bank of Nova Scotia, as
administrative agent, and the lenders party thereto entered into the Fourteenth
Amendment to the Credit Agreement (the "Fourteenth Amendment"). The Fourteenth
Amendment amends the Credit Agreement, dated as of September 18, 2015, by and
among the Company, Gran Tierra Energy International Holdings Ltd., The Bank of
Nova Scotia and the lenders party thereto (as amended, the "Credit Agreement").
The Fourteenth Amendment is effective as of June 1, 2020 and, among other
things, (i) reduces the Borrowing Base (as defined in the Credit Agreement) to
$225,000,000, (ii) provides for certain relief under the financial covenants
until October 1, 2021 (the "Covenant Relief Period"), including relief from
compliance with the ratio of Total Debt to EBITDAX (each as defined in the
Credit Agreement) during the Covenant Relief Period, (iii) amends the interest
rate to either, at the borrower's option, LIBOR plus a spread ranging from 2.90%
to 4.90%, or base rate plus a spread ranging from 1.90% to 3.90%, with such
spread in each case dependent upon the Company's Senior Secured Leverage Ratio
(as defined in the Credit Agreement), provided that during the Covenant Relief
Period the spread shall be increased by 125 basis points, (iv) provides for a
borrowing condition that the Company does not have cash and cash equivalents
(other than Excluded Cash, as defined in the Credit Agreement) in excess of
$15,000,000, (v) adds certain mandatory prepayments, including for cash balances
in excess of $15,000,000 and (v) amends and adds certain negative covenants,
including, without limitation, certain additional limitations on incurrence of
indebtedness, liens and investments, the making of restricted payments,
prepayments of indebtedness, and acquisitions and mergers.
From time to time, the agents, arrangers, book runners and lenders under the
Credit Agreement and their affiliates have provided, and may provide in the
future, investment banking, commercial lending, hedging and financial advisory
services to the Company and its affiliates in the ordinary course of business,
for which they have received, or may in the future receive, customary fees and
commissions for these transactions.
The foregoing description of the Fourteenth Amendment is not complete and is
qualified by reference to the full text of the Fourteenth Amendment, which will
be filed with the Company's Quarterly Report on Form 10-Q for the three months
ending June 30, 2020.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided under Item 1.01 in this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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