CNPC Finance (HK) reschedules — via a one-year maturity extension and interest rate increase — of a $40 million USD revolving credit facility to INOVA Exploration Holdings for working capital purposes (Linked to Record ID#105438)

Project narrative

On August 6, 2010, CNPC Finance (HK) Limited entered into a $40.0 million USD revolving credit facility (RCF) agreement with INOVA Exploration Holdings S.à r.l. — a Luxembourg-incorporated subsidiary of China-incorporated land seismic equipment joint venture INOVA Geophysical Equipment Limited, jointly owned by BGP, Inc. (51% stake) and ION Geophysical Corporation (49% stake) — for working capital purposes. This loan carried a maturity period of three years (36 months) from the first draw down date and an interest rate of LIBOR plus a margin of 160 basis points (bps) payable semi-annually on June 21st and December 21st each year. BGP Inc. issued a guarantee for INOVA's obligations, and in return, INOVA Exploration Holdings was obligated to pay BGP fees at a rate of 1.4% per annum of the outstanding credit facility payable semi-annually on June 21st and December 21st of each year. The credit agreement included customary events of default provisions which had penalties of 30% to 50% of additional based on LIBOR plus a margin of 160 bps if interest or principal payments were failed to be made or the proceeds were used for non-working capital requirements. The proceeds were to be used to fund the working capital needs of INOVA and its subsidiaries. The first draw down occurred on August 9, 2010, so the final maturity date was August 9, 2013. Record ID#105438 captures this loan. As of December 31, 2011, the borrower had $13.0 million USD indebtedness outstanding under the RCF. Total interest expense, including fees paid to BGP recognized during the year ended December 31, 2011 and the period from March 26, 2010 to December 31, 2010 relating to the credit facility amounted to $0.4 million USD and $0.2 million USD, respectively. In 2013, CNPC Finance (UK) entered into an amendment agreement with INOVA Exploration Holdings; in the amendment, the maturity period was extended by one year — for a new maturity period of four years — and the final maturity date was set to August 9, 2014 and the interest rate was increased from LIBOR plus 160 bps to LIBOR plus 210 bps per annum; furthermore the guarantee agreement with BGP was amended to 0.9% per annum. Record ID#105439 captures this rescheduling and amendment.