Close

CALIFORNIA RESOURCES: Signs Forbearance Agreements with Lenders

Subscribe or sign up for a free trial.

California Resources Corporation and certain of its subsidiaries entered into forbearance agreements with:

* certain lenders of approximately 84.6% of the outstanding
principal amount of the loans under its Credit Agreement,
dated as of Sept. 24, 2014, by and among the Company, as the
Borrower, the subsidiary guarantors party thereto, the
various Lenders identified therein, JPMorgan Chase Bank,
N.A., as Administrative Agent, a Lender and a Letter of
Credit Issuer, and Bank of America, N.A., as a Lender and a
Letter of Credit Issuer;

* certain lenders of approximately 61.6% of the outstanding
principal amount of the term loans under its Credit
Agreement, dated Aug. 12, 2016, by and among the Company, as
the Borrower, the various Lenders identified therein and The
Bank of New York Mellon Trust Company, N.A., as
Administrative Agent; and

* certain lenders of approximately 79.1% of the outstanding
principal amount of the term loans under its Credit
Agreement, dated as of Nov. 17, 2017, by and among the
Company, as the Borrower, the subsidiary guarantors party
thereto, the various Lenders identified therein and The Bank
of New York Mellon Trust, N.A., as Administrative Agent.

Pursuant to the Forbearance Agreements, the Forbearing Parties agreed to forbear from exercising any remedies under the Credit Agreements with respect to the failure to make certain interest payments due on May 29, 2020 until the earlier of (a) 11:59 p.m. (New York time) on June 14, 2020 and (b) the date the Forbearance Agreements otherwise terminate in accordance with their terms. The Forbearance Agreements contain certain representations and warranties of the Company and covenants with which the Company must comply during the forbearance period. The failure to comply with such covenants, among other things, would result in the early termination of the forbearance period.

About California Resources

California Resources Corporation is an oil and natural gas exploration and production company headquartered in Los Angeles, California. CRC operates its resource base exclusively within the State of California, applying complementary and integrated infrastructure to gather, process and market its production.

California Resources reported a net loss attributable to common stock of $28 million for the year ended Dec. 31, 2019, compared to net income attributable to common stock of $328 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $6.96 billion in total assets, $709 million in total current liabilities, $4.87 billion in long-term debt, $146 million in deferred gain and issuance costs, $720 million in other long-term liabilities, $802 million in redeemable non-controlling interests, and total deficit of $296 million.

* * *

In March 2019, S&P Global Ratings affirmed its ‘CCC+’ issuer credit rating on California Resources Corp. The affirmation reflects S&P’s expectation that CRC will continue to support its liquidity by balancing its spending with its cash flow, selling non-core assets, and potential for joint ventures in 2019 as mentioned in the Company’s fourth quarter conference call.

As reported by the TCR on April 6, 2020, Moody’s Investors Service downgraded California Resources Corp.’s Corporate Family Rating to Caa3 from Caa1. The rating actions reflect CRC’s elevated restructuring risk, including the potential for a bankruptcy filing or distressed exchange, following its failed attempt to execute a debt for debt exchange in March.

Leave a Reply

Your email address will not be published. Required fields are marked *