Business Context and Reporting Period
This Form 8-K was filed by California Resources Corporation on June 8, 2020, reporting events occurring on June 2, 2020. The filing addresses the company's entry into material definitive agreements regarding its debt obligations.
Key Financial Metrics
The filing does not provide specific values for revenue, profit, cash flow, margins, or total debt levels. It focuses exclusively on the status of specific credit facilities and interest payment obligations.
Material Changes
On June 2, 2020, the Company entered into Forbearance Agreements with lenders holding significant portions of its outstanding debt. These agreements address the Company's failure to make certain interest payments due on May 29, 2020. The agreements cover:
- 2014 Credit Agreement: Lenders holding approximately 84.6% of the outstanding principal.
- 2016 Credit Agreement: Lenders holding approximately 61.6% of the outstanding principal.
- 2017 Credit Agreement: Lenders holding approximately 79.1% of the outstanding principal.
Under these agreements, the lenders agreed to forbear from exercising remedies regarding the missed interest payments until the earlier of 11:59 p.m. (New York time) on June 14, 2020, or the date the agreements otherwise terminate.
Outlook, Risks, and Contingencies
The Forbearance Agreements include specific representations, warranties, and covenants that the Company must comply with during the forbearance period. Failure to comply with these covenants could result in the early termination of the forbearance period, potentially triggering default remedies by the lenders. The filing does not provide forward-looking guidance on revenue or operational outlook.
Investor Verification Checklist
- Verify the total outstanding principal amounts for the 2014, 2016, and 2017 Credit Agreements to assess total exposure.
- Confirm whether the Company successfully made the interest payments due on May 29, 2020, by the June 14, 2020 deadline.
- Review the specific covenants within the attached Forbearance Agreements (Exhibits 10.1, 10.2, and 10.3) to understand conditions for early termination.
- Check for subsequent filings indicating if the forbearance period was extended or if the agreements were terminated early.