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KWK > SEC Filings for KWK > Form 8-K on 21-Jun-2013All Recent SEC Filings

Show all filings for QUICKSILVER RESOURCES INC

Form 8-K for QUICKSILVER RESOURCES INC


21-Jun-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financ


Item 1.01 Entry into a Material Definitive Agreement. New Second Lien Term Loan Agreement

On June 21, 2013, Quicksilver Resources Inc. (the "Company") entered into a $625 million second lien term loan agreement (the "Second Lien Credit Agreement") among the Company, as borrower, the lenders and agents party thereto from time to time and Credit Suisse AG, as administrative agent ("Credit Suisse"). The Second Lien Credit Agreement is scheduled to mature on June 21, 2019, subject to prepayment under certain circumstances.

Under the terms of the Second Lien Credit Agreement, the Company will be required to repurchase or redeem its outstanding 8 1/4% Senior Notes due 2015 (the "2015 Senior Notes") or its outstanding 11 3/4% Senior Notes due 2016 (the "2016 Senior Notes") that remain outstanding after consummation of the tender offer and consent solicitation with respect to the Company's 2015 Senior Notes and 2016 Senior Notes at such time and in such amounts as will result in no more than an aggregate principal amount of $100 million of the 2015 Senior Notes and the 2016 Senior Notes, taken together, to remain outstanding 60 days after completion of the tender offer. In addition, in the event that on the 90th day after completion of the tender offer, any portion of the borrowing under the Second Lien Credit Agreement is not used to fund the Company's refinancing transactions, the terms of the Second Lien Credit Agreement require the Company to repay loans under the Second Lien Credit Agreement in an aggregate amount equal to such portion.

Amounts outstanding under the Second Lien Credit Agreement bear interest, at the Company's election, at (i) adjusted LIBOR (subject to a "floor" of 1.25%) plus an applicable margin of 5.75% or (ii) Alternate Base Rate (subject to a "floor" of 2.25%) plus an applicable margin of 4.75%.

Subject to certain exceptions set forth in the Second Lien Credit Agreement, the representations and warranties and affirmative covenants under the Second Lien Credit Agreement will be substantially consistent with the U.S. First Lien Credit Agreements (described below) and the negative covenants and events of default substantially consistent with the indenture governing the Company's 9 1/8% Senior Notes due 2019 (the "2019 Unsecured Notes"). There will be no financial maintenance covenant under the Second Lien Credit Agreement.

Borrowings under the Second Lien Credit Agreement are guaranteed by certain of the Company's domestic subsidiaries and are secured on a second-lien basis by 100% of the equity interests of each of Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., Barnett Shale Operating LLC, Silver Stream Pipeline Company LLC, QPP Parent LLC and QPP Holdings LLC, 65% of the equity interests of Quicksilver Resources Canada Inc. ("Quicksilver Canada") and Quicksilver Production Partners Operating Ltd. and the majority of Quicksilver's domestic proved oil and gas properties and related assets, (such security interest is junior in priority to the liens securing the obligation under the Company's Combined First Lien Credit Agreements (described below) and pari passu with the 2019 Secured Notes).

Certain of the parties to the Second Lien Credit Agreement and their respective affiliates have, from time to time, performed, and may in the future perform, various financial, advisory, commercial banking and investment banking services for the Company and the Company's affiliates in the ordinary course of business for fees and expenses.

Indenture and 11.000% Senior Notes due 2021

On June 21, 2013, the Company entered into an indenture (the "2021 Indenture") among the Company, certain subsidiaries of the Company as guarantors (the "Subsidiary Guarantors") and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the Company's $325 million aggregate principal amount of 11.000% senior notes due 2021 (the "2021 Notes").

The 2021 Notes are guaranteed on a senior unsecured and joint and several basis by the Subsidiary Guarantors. The 2021 Notes will be senior unsecured obligations of the Company. They will rank equal in right of payment with the Company's and the Subsidiary Guarantors' existing and future senior indebtedness; effectively junior to the Company's and the Subsidiary Guarantors' secured indebtedness to the extent of the value of the collateral securing such indebtedness; senior in right of payment to any of its or the Subsidiary Guarantors' existing and future subordinated indebtedness; and structurally subordinated to the liabilities of the Company's non-guarantor subsidiaries.

The Company will pay interest on the 2021 Notes at 11.000% per annum, payable semiannually on each January 1 and July 1, commencing January 1, 2014, to holders of record on the December 15 or June 15 immediately preceding the interest payment date. The 2021 Notes mature on July 1, 2021.


At any time prior to July 1, 2019, the Company may redeem the 2021 Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount, plus an applicable "make-whole" premium and accrued and unpaid interest. At any time and from time to time on or after July 1, 2019, the Company may redeem the 2021 Notes, in whole or in part, at the redemption prices specified in the 2021 Indenture. At any time prior to July 1, 2016, the Company may redeem . . .



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.



Item 3.03. Material Modification to Rights of Security Holders.
As previously announced, on June 12, 2013, the Company, certain subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee, entered into the Twenty-first and Twenty-second Supplemental Indentures, each dated as of June 12, 2013 (the "Supplemental Indentures"), to the indentures governing the Company's 2015 Senior Notes and its 2016 Senior Notes, respectively. The Supplemental Indentures eliminate or modify certain restrictive covenants and other provisions contained in the indentures governing the 2015 Senior Notes and 2016 Senior Notes. The Supplemental Indentures are effective, and the amendments contained therein became operative upon the Company's acceptance and purchase on June 21, 2013 of the 2015 Senior Notes and 2016 Senior Notes that were validly tendered and not withdrawn prior to the Expiration Time (as defined below) in connection with the Company's previously announced cash tender offers and consent solicitations.
In addition, as previously announced, on June 12, 2013, the Company, certain subsidiary guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee, entered into the Twenty-third Supplemental Indenture dated as of June 12, 2013 (the "Twenty-third Supplemental Indenture"), to the indenture governing the Company's 2019 Unsecured Notes. The Twenty-third Supplemental Indenture permits the Company to refinance the 2016 Subordinated Notes by incurring indebtedness that ranks equally in right of payment to, but with longer maturities than, the 2019 Unsecured Notes, permits any such refinancing of the 2016 Subordinated Notes one year prior to their maturity to be excluded from the covenant regarding limitation on restricted payments in the indenture governing the 2019 Unsecured Notes and gives the Company greater flexibility to incur secured and unsecured indebtedness pursuant to offerings of debt securities in connection with such refinancing or otherwise.
The Twenty-third Supplemental Indenture is effective, and the amendments contained therein became operative upon the Company's acceptance of the requisite consents validly delivered and not validly revoked and payment of the related fees on June 21, 2013 in connection with the Company's previously announced consent solicitation.
The information set forth under Item 1.01 above under "Supplemental Indenture Relating to 9 1/8% Senior Notes due 2019" is incorporated by reference into this Item 3.03.



Item 8.01. Other Events.
Final Results of Tender Offers and Consent Solicitations


On June 21, 2013, the Company issued a press release announcing the expiration and final results of its previously announced cash tender offers and consent solicitations commenced on May 23, 2013. The tender offers and consent solicitations expired at 11:59 P.M., Eastern Time, on June 20, 2013 (the "Expiration Time"). On June 21, 2013, the Company accepted for purchase all the 2015 Senior Notes and 2016 Senior Notes validly tendered and not withdrawn as of the Expiration Time, and payment was made on June 21, 2013.

A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated by reference herein.



Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.                              Description
    4.1      2021 Indenture dated as of June 21, 2013, among Quicksilver
             Resources Inc., the guarantors named therein and The Bank of New
             York Mellon Trust Company, N.A., as trustee

    4.2      2019 Indenture dated as of June 21, 2013, among Quicksilver
             Resources Inc., the guarantors named therein and The Bank of New
             York Mellon Trust Company, N.A., as trustee and second lien
             collateral agent

    4.3      Registration Rights Agreement dated as of June 21, 2013, among
             Quicksilver Resources Inc., the guarantors named therein and Credit
             Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and
             Deutsche Bank Securities Inc., as representatives of the initial
             purchasers

    4.4      Twenty-fourth Supplemental Indenture dated as of June 21, 2013,
             among Quicksilver Resources Inc., the guarantors named therein and
             The Bank of New York Mellon Trust Company, N.A., as trustee

    10.1     Second Lien Credit Agreement dated as of June 21, 2013, among
             Quicksilver Resources Inc., the lenders party thereto and Credit
             Suisse AG, as administrative agent

    10.2     Omnibus Amendment No. 5 dated as of June 21, 2013, among
             Quicksilver Resources Inc., Quicksilver Resources Canada Inc., the
             subsidiary guarantors named therein, the U.S. lenders named
             therein, the Canadian lenders named therein, JPMorgan Chase Bank,
             N.A., as global administrative agent and JPMorgan Chase Bank, N.A.,
             Toronto Branch, as Canadian administrative agent

    99.1     Press release dated June 21, 2013, related to the tenders offers
             and consent solicitations


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