Magnum Hunter Resources Corp (OTCMKTS:MHRC) was a notable decline in trade in the overnight session. The stock plummeted by close to 4% on the above average volumes, which is considered to be a bearish sign. The stock hit a fresh 52-week low during the trading session indicative of the fact that bears are in total control at the moment. The momentum oscillator for the stock continues to trend lower. The stock currently trades below all moving averages. Traders believe the stock plunge to levels of $0.0180 and continue to find resistance near the $0.02 level in the near term.
Magnum Hunter Resources Corp (OTCMKTS:MHRC) has taken a host of steps to revamp its revolving credit facility of late. One such step is refinancing it. As per the reports, it has refinanced senior secured revolving credit facility with a few financial institutions. Apart from this, it has also opted for a secured term loan to instill additional liquidity in the credit facility.
Insights of The Matter
The additional liquidity and refinancing are being offered by the holders of more than a lien term loan agreement and 9.75% Senior Notes due 2020, in equal amounts. All these lenders have agreed to curb the exercise of certain remedies regarding certain default events and work on negotiating the terms of a consensual restructuring.
This term loan facility comprises of a single-tranche term debt in the total principal amount of $60 million. Reportedly it was funded on November 5, 2015. About $44 million out of the total funded $60 million were used in the refinancing procedure of existing outstanding cash collateralize letters of credit and loan. Whatever is left i.e. about $16 million is to be used for general business and corporate purposes and to make the payments of certain expenses and transaction fees.
Moreover, this loan facility makes room for uncommitted incremental credit facility having an aggregate principal amount of $10 million. The maturity date of this new term loan is December 30, 2015.
What’s In There For Magnum
With the help of this new term loan facility, Magnum will be able to instill liquidity in its capital structure as part of different comprehensive steps taken by it lately. It had recently hired Kirkland & Ellis LLP as special legal advisor and PJT Partners LP as financial advisor to ensure that Magnum’s board can get most accurate inputs about financial and legal matters.
Magnum’s senior management team is confident that hiring these two companies will not only enhance the quality of operational but strategic decisions as well in the long run.