ANTERO RESOURCES CORPORATION (NASDAQ:AR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
Indenture
On December21, 2016, Antero Resources Corporation (the
Company) completed the issuance and sale (the
Offering) of $600,000,000 aggregate principal
amount of its 5.0% Senior Notes due 2025 (the
Notes) to J.P. Morgan Securities LLC and the
other initial purchasers (the Initial
Purchasers). The Notes were issued to an indenture,
dated as of December21, 2016 (the Indenture), by
and among the Company, the subsidiary guarantors named therein
(the Guarantors) and Wells Fargo Bank, National
Association, as trustee (the Trustee).
The Notes rank (i)senior in right of payment to all of the
Companys future subordinated indebtedness, (ii)equal in right of
payment with all of the Companys other existing and future senior
indebtedness and (iii)effectively junior to any existing and
future secured indebtedness of the Company, to the extent of the
value of the collateral securing such indebtedness. The
Guarantees (as defined in the Indenture) rank (i)senior in right
of payment to all of the Guarantors future subordinated
indebtedness, (ii)equal in right of payment with all of the
Guarantors other existing and future senior indebtedness,
(iii)effectively junior to any existing and future secured
indebtedness of the Guarantors, to the extent of the collateral
securing such indebtedness, and (iv)effectively junior to all
future indebtedness of any non-guarantor subsidiary of the
Guarantors.
Interest on the Notes accrues from December21, 2016 at a rate of
5.0% per year. Interest on the Notes is payable semi-annually in
arrears on March1 and September1 of each year, commencing on
March1, 2017.
The Indenture contains covenants that, among other things, limit
the Companys ability and the ability of certain of its
subsidiaries to:
incur or guarantee additional indebtedness or issue certain
preferred stock;
pay dividends, repurchase equity securities, redeem subordinated
debt or make investments or other restricted payments;
transfer or sell assets;
create or incur liens;
change the Companys line of business;
enter into certain transactions with affiliates; and
merge, consolidate or transfer substantially all of the Companys
assets.
These and other covenants that are contained in the Indenture are
subject to important exceptions and qualifications.
On or after March1, 2020, the Company may redeem all or part of
the Notes at the following redemption prices, plus accrued and
unpaid interest on the Notes, if any, to the applicable
redemption date:
|
Year |
|
Percentage |
|
|
103.750 |
% |
||
|
102.500 |
% |
||
|
101.250 |
% |
||
|
2023 and thereafter |
100.000 |
% |
In addition, on or prior to March1, 2020, the Company may, from
time to time, redeem up to 35% of the aggregate principal amount
of the Notes with the net cash proceeds of certain equity
offerings at a redemption price of 105.0% of the principal amount
of the Notes, plus any accrued and unpaid interest to the date of
such redemption.
At any time prior to March1, 2020, the Company may redeem the
Notes, in whole or in part, at a redemption equal to 50% of the
principal amount of the Notes, plus the Applicable Premium (as
defined in the Indenture), together with any accrued and unpaid
interest to the date of such redemption.
Upon the occurrence of a Change of Control (as defined in the
Indenture), the holders of the Notes will have the right to
require the Company to repurchase all or a portion of the Notes
at a price equal to 101% of the principal amount of the Notes,
plus any accrued and unpaid interest to the date of purchase.
A copy of the Indenture is filed as Exhibit4.1 hereto and is
incorporated herein by reference. The description of the
Indenture and the Notes contained herein is qualified in
entirety by the full text of such instruments.
Registration Rights Agreement
Also on December21, 2016, in connection with the closing of the
Offering, the Company and each of the Guarantors (collectively,
the Issuers) entered into a Registration
Rights Agreement (the Registration Rights
Agreement) with J.P. Morgan Securities LLC, as
representative of the Initial Purchasers, to which the Issuers
agreed (a)(i)to file with the Securities and Exchange
Commission a registration statement (the Exchange Offer
Registration Statement) on an appropriate form under
the Securities Act, with respect to a registered offer to
exchange any and all of the Notes (including the guarantees
with respect thereto) for a like aggregate principal amount of
registered notes that are identical in all material respects to
the Notes (except that the exchange notes will not contain
restrictive legends, transfer restrictions or provide for any
increase in annual interest rate for failure to comply with
this should holders of the Notes suffer damage if the Issuers
fail to fulfill their obligations under the Registration Rights
Agreement) and/or (ii)under certain circumstances set forth in
the Registration Rights Agreement, a shelf registration
statement to Rule415 under the Securities Act relating to the
resale by certain holders of the Notes and the Guarantees
thereof, (b)to use their reasonable best efforts to cause the
(i)Exchange Offer Registration Statement to become and remain
effective under the Securities Act until 180 days following the
Exchange Date (as defined in the Registration Rights Agreement)
or (ii)if applicable, the shelf registration statement to
become and remain effective under the Securities Act until one
year following effectiveness, and (c)to use their reasonable
best efforts to commence the exchange offer not later than 60
days after the date on which the Exchange Offer Registration
Statement is declared effective. If the Issuers fail to comply
with certain obligations under the Registration Rights
Agreement, including if the exchange offer is not completed or
if the shelf registration statement is not declared effective
by December21, 2017, they will be required to pay additional
interest of 1% to the holders of the Notes in accordance with
the provisions of the Registration Rights Agreement.
A copy of the Registration Rights Agreement is filed as
Exhibit4.3 hereto and is incorporated herein by reference. The
description of the Registration Rights Agreement contained
herein is qualified in its entirety by the full text of such
exhibit.
Relationships
Certain Initial Purchasers or their respective affiliates
(collectively, the Banks), perform and have
performed commercial and investment banking and advisory
services for the Company from time to time for which they
receive and have received customary fees and expenses. In
particular, affiliates of certain of the Initial Purchasers are
lenders under the Companys Fourth Amended and Restated Credit
Agreement with the lenders party thereto and JPMorgan Chase
Bank, N.A., as administrative agent (the Company Credit
Agreement) and therefore may receive their pro rata
share of any proceeds from the sale of the Notes that are used
to repay borrowings under the Company Credit Agreement. The
Banks may, from time to time, engage in transactions with and
perform services for the Company in the ordinary course of
their business, for which they will receive fees and expenses.
Item 2.03 Creation of Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet
Arrangement of Registrant.
The information included under the heading Indenture in Item
1.01 of this Current Report on Form8-K is incorporated by
reference into this Item 2.03 of this Current Report on
Form8-K.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
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EXHIBIT |
|
DESCRIPTION |
|
4.1 |
Indenture, dated as of December21, 2016, by and among |
|
|
4.2 |
Formof 5.0% Senior Note due 2025 (included in |
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|
4.3 |
Registration Rights Agreement, dated as of December21, |
