Kosmos Energy refinances reserve-based lending facility

29th Apr 2024 07:16

(Sharecast News) - Kosmos Energy announced the refinancing of its reserve-based lending (RBL) facility on Monday, with its final maturity now set for December 2029.

The company said that, in tandem with the spring redetermination, it had augmented the total RBL facility size to $1.35bn, up from $1.25bn, with current commitments standing at around $1.2bn.

Ongoing discussions with additional potential lenders were expected to further boost commitments later in the year, bolstering the facility size.

Currently, $800m was drawn against the RBL facility, with the first amortisation payment slated for 1 April 2027.

Secured against the company's production assets in Ghana and Equatorial Guinea, the RBL facility maintained the integrity of Kosmos Energy's assets in the US Gulf of Mexico, and Mauritania and Senegal, which remained unencumbered.

Following the spring re-determination, the resulting borrowing base surpassed the RBL facility size.

Reflecting the current banking market environment, the interest margin payable on the RBL saw a slight increase compared to the previous facility.

The new interest margin on the RBL facility started at 400 basis points above the Secured Overnight Financing Rate (SOFR) for the first two years.

As part of the RBL facility refinancing, Kosmos said it had downsized its revolving credit facility (RCF) from $250m to about $165m.

Some banks transferred their commitments from the RCF to the RBL in anticipation of the RCF maturing at the end of 2024, streamlining the company's financial structures in alignment with its long-term objectives.

"Refinancing the RBL facility is another important step to optimise Kosmos' capital structure and proactively address our debt maturities," said chief financial officer Neal Shah.

"With the refinancing of the RBL and the recent convertible bond issuance, we have no maturities until 2026 and lower interest expense going forward.

"We thank our bank group for their continued support as we grow the company."

Reporting by Josh White for Sharecast.com.