LINN Energy Announces Updates $LINE

As previously announced, the Company is currently in the process of exploring strategic alternatives to strengthen its balance sheet and maximize the value of the Company and has engaged its financial and legal advisors along with its lenders in discussions on how to best reduce the Company’s debt and ensure its long-term liquidity needs are met, including the possibility of restructuring under a chapter 11 plan of reorganization.

As part of this process, LINN and Berry intend to elect to exercise the 30-day grace period with respect to an interest payment due April 15, 2016 of approximately $31 million on LINN’s 8.625% senior notes due April 2020 and interest payments due May 1, 2016 of approximately $18.2 million on LINN’s 6.25% senior notes due May 2019 and approximately $8.8 million on Berry’s 6.75% senior notes due November 2020. If LINN fails to make the interest payments within the applicable 30-day grace period and is otherwise unable to obtain a waiver or other suitable relief from the holders under the indentures governing the senior notes prior to the expiration of the 30-day grace period, the resulting default under the applicable indenture will mature into an event of default, allowing the noteholders to elect to accelerate the outstanding indebtedness under the senior notes.

On April 12, 2016, LINN entered into the Eighth Amendment to its Sixth Amended and Restated Credit Agreement among LINN, Wells Fargo Bank, NA, as administrative agent (the “Agent”), and the lenders party thereto. The Eighth Amendment provides:

    An agreement that certain specified events will not become defaults or events of default until May 11, 2016;
    The borrowing base will remain constant until May 11, 2016, subject to reductions based on sales of assets or termination of hedge agreements; and
    LINN, the Agent and the lenders will negotiate in good faith an agreement in furtherance of a restructuring of the capital structure of LINN.

In addition, on April 12, 2016 Berry entered into the Twelfth Amendment to its Second Amended and Restated Credit Agreement among Berry, Wells Fargo Bank, NA, as administrative agent (the “Berry Agent”), and the lenders party thereto. The Twelfth Amendment provides:

    An agreement that certain specified events will not become defaults or events of default until May 11, 2016;
    The borrowing base will remain constant until May 11, 2016, subject to reductions based on sales of assets or termination of hedge agreements; and
    Berry will have access to $45 million in cash that is currently restricted in order to fund ordinary course operations; and
    Berry, the Berry Agent and the lenders will negotiate in good faith an agreement in furtherance of a restructuring of the capital structure of Berry.