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Crescent Energy Company (NYSE:CRGY) reported Wednesday that its subsidiary, Crescent Energy Finance LLC, entered into the Thirteenth Amendment to its existing credit agreement. The amendment, disclosed in a statement based on a filing with the Securities and Exchange Commission, modifies several key terms of the company’s revolving credit facility.
The amendment includes a provision for an automatic $1.3 billion increase in the borrowing base, raising it from $2.6 billion to $3.9 billion. This increase will become effective upon the completion of the proposed business combination between Crescent Energy and Vital Energy, Inc., subject to certain conditions. The company’s current ratio of 0.88 indicates that short-term obligations exceed liquid assets, highlighting the importance of this credit facility expansion.
The maturity date for any revolving loans under the agreement has been extended to October 22, 2030, from the previous date of April 10, 2029. The applicable margin for loans has been reduced, with future loans to be priced at the Secured Overnight Financing Rate (SOFR) plus 1.75% to 2.75%.
Additionally, the aggregate maximum credit amount under Crescent’s credit facility has been raised from $3.0 billion to $6.0 billion. The aggregate elected commitments remain at $2.0 billion.
Wells Fargo Bank, National Association, continues to serve as administrative agent, collateral agent, and a letter of credit issuer for the facility. The amendment is tied to the ongoing transaction between Crescent Energy and Vital Energy, which is pending shareholder and regulatory approval.
The company stated that the amendment and related details are included in its current report on Form 8-K filed with the SEC. Despite the debt considerations, Crescent Energy has demonstrated strong revenue growth of 32.84% and maintains a dividend yield of 5.82%. For deeper insights into CRGY’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities with expert analysis and actionable intelligence.
In other recent news, Crescent Energy Company has made significant financial and strategic moves. The company announced a 50% increase in its borrowing base, raising it from $2.6 billion to $3.9 billion, while maintaining its elected commitment amount at $2.0 billion and extending the facility’s maturity to five years. Additionally, Crescent Energy expects to receive approximately $37 million in cash from hedge settlements for the third quarter, with a total of $81 million anticipated for the first nine months of the year. The expected third-quarter hedge cash flow includes $22 million from net cash received on settlement of derivatives and $15 million from the settlement of acquired derivative contracts related to the SilverBow Merger.
In merger news, Crescent Energy is in advanced talks to acquire Vital Energy in an all-stock deal valued at approximately $3.1 billion, including Vital’s $2.3 billion debt. This acquisition has led Fitch Ratings to revise Crescent’s outlook to positive from stable, affirming the company’s Long-Term Issuer Default Ratings at ’BB-’. Furthermore, KeyBanc has reiterated its Overweight rating on Crescent Energy, maintaining a $14 price target following the acquisition announcement. These developments highlight Crescent Energy’s strategic efforts to expand its operations and financial capabilities.
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