Themes from early bankruptcies in the upstream oil and gas sector may provide insight regarding exit financing for the next wave of companies entering the restructuring process. The current industry downturn, fueled and exacerbated by impacts from the COVID-19 pandemic and the Saudi Arabia/Russia oil price war, has led to a series of bankruptcies beginning in early 2020. Initial filers are now starting to emerge with revamped capital structures, including new bank credit facilities, offering information regarding the terms of those credit facilities and the process/requirements for securing agreement between lenders and borrowers. These exit credit facility terms and requirements also portend what banks will expect on a continuing basis for conforming reserve-based loans (RBL).
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