Sidley represented JPMorgan Chase Bank, N.A., as administrative agent, in connection with the amendment and restatement of Southwestern Energy Company’s US$3.5 billion senior secured revolving credit facility. The amendment extends the maturity date of the reserve-based credit facility by three years, to April 2027, and includes mechanisms for the credit facility to be modified automatically in the future upon the achievement of certain improvements in the company’s credit ratings. Specifically, upon Southwestern Energy receiving an investment grade rating from either S&P or Moody’s and the satisfaction of certain other conditions, the subsidiary guarantees and collateral will be released and the borrowing base construct will be replaced with a PV-9 coverage ratio covenant. Additionally, upon Southwestern Energy receiving two or more investment grade ratings from S&P, Moody’s or Fitch, the “pre-investment grade” credit agreement will be replaced with a new investment grade credit agreement that reflects market terms for investment grade borrowers. This unique approach represents the first of its kind in the reserve-based lending market.
The Sidley team was led by partner Herschel Hamner with support from senior managing associate Quan Lu and associates Forrest Brown, Dane Rupley, and Nick Kalina. Additional support was provided by partners Heather Palmer (Environmental), Azad Assadipour and Ellen Pesch (Derivatives), as well as partner Eric Winwood and counsel Marian Fielding (both Employee Benefits and Executive Compensation).