DEBTWIRE BROADCAST: MAGNUM HUNTER’S BANKRUPTCY PLAN SLASHES FUNDED DEBT TO ZERO… SO WHAT’S THE CATCH? Debtwire’s team of reporters and analysts host a roundtable discussion to explore Magnum Hunter’s plan to eliminate its entire prepetition funded debtload, as well as highlight how the deal architects potentially skirted some of the stumbling blocks that cropped up in other recent court proceedings. | 17 December 2015
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DEBTWIRE BROADCAST: MAGNUM HUNTER’S BANKRUPTCY PLAN SLASHES FUNDED DEBT TO ZERO… SO WHAT’S THE CATCH? | 17 December 2015 Debtwire’s team of reporters and.
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DEBTWIRE BROADCAST:MAGNUM HUNTER’S BANKRUPTCY PLAN SLASHES FUNDED DEBT TO ZERO… SO WHAT’S THE CATCH?
Debtwire’s team of reporters and analysts host a roundtable discussion to explore Magnum Hunter’s plan to eliminate its entire prepetition funded debtload, as well as highlight how the deal architects potentially skirted some of the stumbling blocks that cropped up in other recent court proceedings. | 17 December 2015
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AGENDA
Opening Remarks: Kate Marino
The Eureka Factor: Alexander Gladstone Case Overview
Financial Analysis: Thomas Rorick
First Day Hearing: Patrick Holohan
Legal Analysis: Richard M. Goldman
Concluding remarks: Alexander GladstoneWhat’s next?
Strategic options center on stake in Eureka Hunter Holdings
Failure to achieve asset sales
Status of second lien claim on Eureka
Second lien and unsecured holders collaborate on rescue loan to buy time
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FINANCIAL ANALYSIS: ADJUSTED CAPITAL STRUCTURE
1) The DIP Term Loan Facility is subject to a 1% Libor floor. The DIP Term Loan facility will mature the earlier of a) nine months after the closing date, b) 30 days after entering into the Interim DIP Order approving the DIP Facility if the Final DIP Order has not been entered into by the Bankruptcy Court prior to the 30 day period, c) effective date of plan of reorganization or liquidation or d) termination by the DIP Facility Lenders following an event of default.
2) Absent an event of default the Bridge Financing Facility is due on the earlier of 30 December 2015 or the filing of a Chapter 11 case.3) The second-lien term loan is subject to a 1% LIBOR floor.4) On 9 October, MHR suspended the monthly dividends on its preferred stock. Unpaid dividends will continue to accumulate from 31 October and afterward.5) Under the RSA, the total enterprise value assumed is USD 900m.
1) Our recovery for DIP Lenders includes the 3% Backstop Fee payable in New Common Equity.Sources: 3Q15 10-Q Report, Court Filings, Debtwire Analytics.
SOURCES & USES
Sources Uses
DIP Term Loan Facility 200 Repayment of First Lien Bridge Financing Facility 70
Commitment fee 4
Cash collateralize letters of credit 39
General unsecured claims 67
Cash used during bankruptcy 20
Total Sources 200 Total Uses 200
PLAN RECOVERIES (USDm)
Class Portion of New Common Equity Value of Equity Received Claim Estimated Recoveries
Industry comps – Samson Resources and Sabine Oil & Gas
Throwing a wrench in the works
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CONCLUDING REMARKS: WHAT’S NEXT?
What happens to Eureka stake?
How can Magnum generate value for post-reorg equity holders?
DISCLAIMER
We have obtained the information provided in this report in good faith from publicly available data as well as Debtwire data and intelligence, which we consider to be reliable. This information is not intended to provide tax, legal or investment advice. You should seek independent tax, legal and/or investment advice before acting on information obtained from this report. We shall not be liable for any mistakes, errors, inaccuracies or omissions in, or incompleteness of, any information contained in this report, and not for any delays in updating the information.
We make no representations or warranties in regard to the contents of and materials provided on this report and exclude all representations, conditions, and warranties, express or implied arising by operation of law or otherwise, to the fullest extent permitted by law. We shall not be liable under any circumstances for any trading, investment, or other losses which may be incurred as a result of use of or reliance on information provided by this report. All such liability is excluded to the fullest extent permitted by law.
Any opinions expressed herein are statements of our judgment at the date of publication and are subject to change without notice. Reproduction without written permission is prohibited. For additional information call Debtwire Analytics at (212) 686-5374.
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