Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) has announced the securitisation of assets in the Barnett Shale in North Texas.
The company highlighted that it represents the company’s second sustainability-linked ABS and fourth ABS since late 2019. It added that it shows the increasing depth of investors for this type of product.
Proceeds from the securitisation amount to US$160mln (gross) and are earmarked for repayment of funds under a reserves-based lending facility – which, according to DEC, results in liquidity of more than $400mln (pro forma as of 31 December 2021).
The ABS note will carry a 4.95% fixed coupon and is rated BBB by Fitch. It has a scheduled fully amortised maturity in September 2030.
Moodys, meanwhile, has provided an ESG Assessment and DEC notes that the coupon-rate is ‘sustainability-linked’.
"We are pleased to close our fourth ABS in less than a month of closing our third ABS,” said DEC chief executive Rusty Hutson.
“This transaction represents the first group of assets we securitised outside of our Appalachia area, demonstrating our ability to securitise assets at low, fixed rates across both of our operating regions.
“As with our most recent ABS and reflective of our broad ESG commitments, we are delighted to again be incorporating our ESG score from Moody's ESG Solutions into the coupon of the notes.”
Hutson added: “liquidity is the highest in Diversified's history, strengthening our ability to transact attractive acquisition opportunities without relying on new equity contributions.
“Having significantly expanded our portfolio of producing assets last year with our entry into the Central Region, we look forward to pursuing additional ABS transactions this year given a favourable commodity price backdrop and increasing investor demand for securitisations of well-operated oil and natural gas assets."
The assets used in the ABS were previously pledged as collateral under the RBL, representing around 9% of the facility’s collateral.