Bonanza Creek Taps $209 Million Credit Facility

Aside from secondaries, expect to see a lot of this. These oil companies set up rich and cheap credit facilities with banks when times were good. Now that they’re all out of money and bleeding out, banks are ruing the day when they decide to tap them.

That day was just thrusted upon BNP Paribas today, by Bonanza Creek.

Co elected to draw down $209 million on its credit facility, and currently has an aggregate of $300 million of borrowings, including a $12 million letter of credit, under the facility. As of March 9, 2016, the Company had $235 million of cash on its balance sheet after taking the recent draw into account.
‘Our recent election to draw down $209 million on our revolver was a risk management decision structured to mitigate exposure to capital market externalities in 2016.’

This is the part of the story when the risk to the balance sheets of the banks expands, exponentially.