Southwestern Energy Company (NYSE:SWN) Enters Into A Three-Year Term Loan Deal


Southwestern Energy Company (NYSE:SWN) was a massive decliner during Thursday’s trading session plummeting by close to 8% on relative high volumes, which were 1.5 times the daily average. The stock has been trending lower ever since it broke below the important support level at $12.12. Southwestern currently trades below all daily moving averages, which is a seen as a negative.The indicator measuring relative strength provided a fresh sell signal indicative of the strong selling interest. The oscillator for momentum is showing no signs of a bullish reversal. The stock is currently trading near its 52-week low, which is a bearish signal.


Southwestern Energy Company (NYSE:SWN) reported that it finalized a three-year term loan deal worth $750 million and utilized its funds to repay the balance amount under its current commercial paper program and credit facility. The term loan comes in the list of unsecured loans and includes an interest rate based upon thecredit rating of the company.

The details

The term loan can be is prepaid at any time and needs prepayment from the net cash funds of any issuance of equity securities or debt and sales of assets, with some exceptions. Other terms in the term loan are noticeably the same as those checked in the current revolving credit facility. Southwestern Energy also submitted an automatic shelf Registration Statement, “new shelf” on Form S-3.

The change

This new statement will replace its previous automatic shelf Registration Statement submitted on Form S-3 in November 9, 2012. The old shelf terminated in last month, and completed the third anniversary of its completion, in accordance with the guidelines pursuant to the “Securities Act of 1933.” Southwestern submitted the new shelf statement due to the termination of the old shelf registration statement and not in expectation of any specific securities offerings.

The management view

Steve Mueller, the Chief Executive Officer and Chairman of Southwestern Energy, reported that they are delighted with the robust support from the respective banks in shifting $750 million of company’s prevailing debt to the term loan, which in turn will increase overall liquidity. They are committed to create long-term value for the company’s shareholders.

The expectation

These actions measures reported in last month reflect sound financial regulations that are aligned with the commitment. The management also remain dedicated to a flexible capital plan that is responsive to the changing commodity price environment and expect outstanding debt to decline or remain flat throughout 2016.