Item 1.01. Entry into a Material Definitive Agreement.
On July 27, 2022, New Fortress Energy Inc. ("NFE"), acting as Borrower, and
certain subsidiaries of NFE, acting as Guarantors, entered into an Amendment and
Restatement to the Uncommitted Letter of Credit and Reimbursement Agreement ("LC
Facility", and as amended and restated, the "A&R LC Facility"), dated as of July
16, 2021, with Natixis, New York Branch, as the Sole Lead Arranger and
Documentation Agent, Natixis, New York Branch, as the ULCA Collateral Agent,
Natixis, New York Branch, as the Administrative Agent, and Natixis, New York
Branch and certain other financial institutions as Lenders and Issuing Banks for
the provision of certain letters of credit to the Borrower and its subsidiaries.
The A&R LC Facility was increased to an initial amount of $250,000,000, as may
be increased by an additional principal amount of up to $100,000,000, subject to
satisfaction of certain conditions. The A&R LC Facility provides for the
issuance of letters of credit by the Lenders and Issuing Banks. The A&R LC
Facility has a term of one year and will mature in 2023, with the potential for
the Borrower to extend the maturity date.
The letters of credit and the proceeds thereof will be used to support or make
payment on account of any default by the Borrower or any subsidiary account
party in the performance of a commercial obligation under a non-financial
agreement or arrangement relating to the performance of services, delivery of
goods, or advance payment, or retention or warranty obligations, in each case in
connection with business activities in the ordinary course of business of
Borrower or such subsidiary, in each case, subject to applicable law and the
terms of the A&R LC Facility.
The obligations under the A&R LC Facility are guaranteed, jointly and severally,
subject to certain exceptions and thresholds, by each domestic subsidiary and
foreign subsidiary that is a wholly-owned restricted subsidiary of the Borrower,
other than (as defined in the A&R LC Facility) (i) any Qualified Liquefaction
Development Entities, (ii) any Receivables Subsidiaries, (iii) any Immaterial
Subsidiaries, (iv) any Captive Insurance Subsidiaries, (v) any not-for-profit or
special purpose Subsidiaries and (vi) any Subsidiary with respect to which a
guarantee would result in material adverse tax consequences, as reasonably
determined by the Borrower (the "guarantors"). The obligations of the Borrower
and the guarantors are senior secured obligations of the Borrower and the
guarantors, secured on a first-priority basis by liens on the collateral,
subject to permitted liens and certain other exceptions. The security interest
of the secured parties under the A&R LC Facility in the collateral ranks pari
passu with the security interest of the holders of the Company's existing 6.750%
Senior Secured Notes due 2025, the Company's existing 6.50% Senior Secured Notes
due 2026, and the Company's Revolving Credit Facility, and an equal priority
intercreditor agreement governs the treatment of such collateral.
The letters of credit bear interest at a rate equal to (i) a base rate equal to
the higher of the rate last quoted by The Wall Street Journal as the "Prime
Rate" and a rate tied to the Federal Reserve Bank of New York, plus 0.50%, plus
(ii) an applicable margin of 2.25%.
The A&R LC Facility contains usual and customary representations and warranties,
and usual and customary affirmative and negative covenants. The affirmative
covenants include, among other things, delivery of financial statements,
compliance certificates and notices, payment of taxes and other obligations,
conduct of business and maintenance of existence, compliance with applicable
laws and regulations, maintenance of properties and insurance, maintenance of
books and records and provision of guarantees and collateral.
The negative covenants include limitations on restricted payments, dividends and
other payment restrictions affecting subsidiaries, indebtedness, asset sales,
transactions with affiliates, liens, mergers, consolidation or sale of all or
substantially all assets, and maintenance of a total debt to capitalization
ratio and a total first lien debt to adjusted EBITDA ratio (which latter
covenant shall be tested only if the Borrower is required to test under the
Company's Revolving Credit Facility). The A&R LC Facility also contains usual
and customary events of default (subject to grace periods), including
non-payment of principal, interest, fees and other amounts; material breach of a
representation or warranty; covenant defaults, acceleration of other material
debt; material judgments; bankruptcy or insolvency; ERISA-related defaults;
impairment of security or guarantees; and change of control.
The descriptions of the A&R LC Facility set forth in this Item 1.01 do not
purport to be complete and are qualified in their entirety by reference to the
full text of the A&R LC Facility a copy of which will be filed with the U.S.
Securities and Exchange Commission as an exhibit to NFE's Quarterly Report on
Form 10-Q for the six months ending June 30, 2022.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03 insofar as it relates to the
creation of a direct financial obligation of the Borrower.
Item 9.01. Financial Statements and Exhibits.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within
the Inline XBRL document.
© Edgar Online, source Glimpses