SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 15, 2017
WildHorse Resource Development Corporation
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
||(Commission File Number)
9805 Katy Freeway, Suite 400
Houston, TX 77024
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (713) 568-4910
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01 Entry into a Material Definitive Agreement.
On September 19,
2017, WildHorse Resource Development Corporation (the Company), completed its private placement of $150.0 million in aggregate principal amount of the Companys 6.875% Senior Notes due 2025 (the New Notes) to Wells Fargo
Securities, LLC (the Representative) and the other initial purchasers (collectively, the Initial Purchasers). The New Notes rank equally with, and are treated under the Indenture (as defined below) as a single class of debt
securities with, the $350.0 million aggregate principal amount of the outstanding 6.875% Senior Notes due 2025 previously issued by the Company on February 1, 2017 (the Initial Notes and, together with the New Notes, the
Notes). The New Notes were issued at a price of 98.26% of par, and the sale resulted in net proceeds (after deducting the Initial Purchasers discounts and commissions and estimated offering expenses and excluding accrued interest)
to the Company of approximately $144.1 million. The Company intends to use the net proceeds to repay the borrowings outstanding under the Companys revolving credit facility and for general corporate purposes. The closing of the issuance
and sale of the New Notes occurred on September 19, 2017.
The New Notes were issued and sold to the Initial Purchasers in a private
placement exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). The Initial Purchasers intend to resell the New Notes to qualified institutional buyers inside the United States in
reliance on Rule 144A of the Securities Act and to persons outside the United States under Regulation S of the Securities Act. The New Notes have not been registered under the Securities Act or applicable state securities laws and may not be offered
or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The New Notes were issued pursuant to an indenture, dated February 1, 2017 (as
supplemented, the Indenture), among the Company, the subsidiary guarantors named therein (including WHR Eagle Ford LLC, the Guarantors) and U.S. Bank National Association, as trustee.
The Notes are the general unsecured senior obligations of the Company. The Notes rank equally in right of payment with all of the
Companys existing and future senior unsecured indebtedness and senior in right of payment to any of the Companys existing and future subordinated indebtedness. The Notes are effectively junior in right of payment to all of the
Companys existing and future secured indebtedness and other secured obligations, including borrowings outstanding under the Companys revolving credit facility, to the extent of the value of the assets securing such indebtedness and
obligations. The Notes are structurally junior to all existing and future indebtedness and other liabilities of any non-guarantor subsidiaries. The Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of the
Guarantors and by certain future subsidiaries of the Company.
Maturity and Interest
The Notes will mature on February 1, 2025. Interest on the New Notes will accrue from August 1, 2017 and will be payable semiannually
on February 1 and August 1 of each year.
The Company may redeem all or any part of the Notes at a make-whole redemption price specified in the Indenture, plus accrued and
unpaid interest, at any time before February 1, 2020. The Company may also, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the Notes prior to February 1, 2020, in an amount not greater than the net cash
proceeds from one or more equity offerings at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest, if any, under certain circumstances. In addition, the Company has the option to redeem all or a portion
of the Notes at any time on or after February 1, 2020 at the redemption prices specified in the Indenture plus accrued and unpaid interest, if any. The Company may also be required to repurchase the Notes upon a change of control followed by a
rating decline, as described more fully in the Indenture.
The Indenture restricts the Companys ability, and the ability of the Companys restricted subsidiaries, to: (i) pay dividends
on, purchase or redeem the Companys common stock or purchase or redeem subordinated debt; (ii) make certain investments; (iii) incur or guarantee additional indebtedness or issue certain types of equity securities; (iv) create
or incur certain secured debt; (v) sell assets; (vi) consolidate, merge or transfer all or substantially all of the Companys assets; (vii) enter into agreements that restrict distributions or other payments from the
Companys restricted subsidiaries to the Company; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to a number of important qualifications and limitations. In
addition, most of the covenants will be terminated before the Notes mature if at any time no default (as defined under the Indenture) exists under the Indenture and the Notes receive an investment grade rating from both of two specified ratings
Events of Default
The Indenture contains customary events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency
with respect to the Company or any of the Companys restricted subsidiaries that is (or group of restricted subsidiaries that, taken together would be) a significant subsidiary, all outstanding Notes will become due and payable immediately
without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.
The foregoing description of the Indenture is not complete and is qualified in its entirety by reference to the full text of the Indenture, a
copy of which was filed as Exhibit 4.1 to the Current Report on Form 8-K filed with Securities Exchange Commission (the Commission) on February 1, 2017 and is incorporated herein by reference.
Registration Rights Agreement
connection with the issuance and sale of the New Notes, the Company and the Guarantors entered into a registration rights agreement (the Registration Rights Agreement) with the Representative, as representative of the Initial Purchasers,
dated September 19, 2017. Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to file a registration statement with the Securities and Exchange Commission so that holders of the New Notes can exchange the New
Notes for registered notes that have substantially identical terms as the New Notes. In addition, the Company and the Guarantors have agreed to exchange the guarantees related to the New Notes for registered guarantees having substantially the same
terms as the original guarantees. The Company and the Guarantors will use commercially reasonable best efforts to cause the exchange to be consummated by February 1, 2018. The Company and the Guarantors are required to pay additional interest
if they fail to comply with their obligations to register the New Notes within the specified time periods.
The foregoing description of
the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, a copy of which is filed as Exhibit 4.3 to this Current Report on Form 8-K and is
incorporated herein by reference.
On September 15, 2017, the Company entered into a purchase agreement (the Purchase Agreement), by and among the Company, the
Guarantors and the Representative, as representative of the Initial Purchasers, pursuant to which the Company agreed to issue and sell to the Initial Purchasers the New Notes as described above.
The Purchase Agreement contains customary representations, warranties and agreements of the parties and customary conditions to closing,
obligations of the parties and termination provisions. The Company and the Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the
Initial Purchasers may be required to make because of any of those liabilities.
Certain of the Initial Purchasers or their affiliates perform and have performed commercial and investment banking and advisory services for
the Company from time to time for which they receive and have received customary fees and reimbursement of expenses. In particular, certain of the Initial Purchasers or their affiliates participated as underwriters in the Companys initial
public offering of its common stock and the offering of the Initial Notes receiving customary fees for such services. In addition, affiliates of each of the Initial Purchasers are lenders under the Companys revolving credit facility and
therefore may receive their pro rata share of the net proceeds from the sale of the New Notes that are used to repay borrowings under the Companys revolving credit facility. The Initial Purchasers may, from time to time, engage in transactions
with and perform services for the Company in the ordinary course of their business for which they will receive customary fees and reimbursement of expenses.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this
Item 8.01 Other Events
On September 15, 2017, the Company issued a press release announcing that it had priced its private placement of the New Notes. A copy of
the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 8.01 by reference.
The press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
Item 9.01 Financial Statements and Exhibits.
||Indenture, dated as of February
1, 2017, by and among WildHorse Resource Development Corporation, the subsidiary guarantors named therein and U.S. Bank National Association, as Trustee, incorporated by reference herein to Exhibit 4.1 to the Companys Form 8-K filed on February 1,
||Form of 6.875% Senior Note due 2025 (included as Exhibit A to Exhibit 4.1)|
||Registration Rights Agreement, dated as of September 19, 2017, by and among WildHorse Resource Development Corporation, the subsidiary guarantors named therein and Wells Fargo Securities, LLC, as representative
of the initial purchasers named therein |
||Press release dated September 15, 2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
||/s/ Kyle N. Roane|
||Kyle N. Roane|
||Executive Vice President, General Counsel and Corporate Secretary|
Dated: September 20, 2017