RE: Malcy3 Jan 2024 11:41
From the SEC filing
"In November 2023, we formed DP Lion Holdco LLC, a limited-purpose, **bankruptcy remote**, wholly
owned subsidiary, to issue Class A and Class B asset-backed security Notes (collectively “ABS VII”), which
are secured by certain producing natural gas and oil assets located in Appalachia. The Class A Notes are
rated BBB+ and were issued in an aggregate principal amount of $142 million. The Class B Notes are rated
BB- and were issued in an aggregate principal amount of $20 million.
The ABS VII Class A Notes accrue interest at a stated 8.243% rate per annum and have a final maturity
date of November 2043 with an amortizing maturity of February 2034. The ABS VII Class B Notes accrue
interest at a stated 12.725% rate per annum and have a final maturity date of November 2043 with an
amortizing maturity of August 2032. Interest and principal payments on the ABS VII Class A and Class B
Notes are payable on a monthly basis.
Based on whether certain performance metrics are achieved, the ABS VII Class A and Class B Notes
could be required to apply 25% to 100% of any excess cash flow to make additional principal payments. In
particular, for the Class A Notes, (a) (i) If the Senior DSCR as of the applicable Payment Date is less than
1.20 to 1.00, then 100%, (ii) if the DSCR as of such Payment Date is greater than or equal to 1.20 to 1.00
and less than 1.25 to 1.00, then 50%, or (iii) if the DSCR as of such Payment Date is greater than or equal to
1.25 to 1.00, then 25%; (b) if the production tracking rate is less than 80%, then 100%, otherwise 25%; and
(c) if the Senior LTV is greater than 75%, then 100%, otherwise 25%.
For the Class B Notes, (a) (i) If the Aggregate DSCR as of the applicable Payment Date is less than
1.20 to 1.00, then 100%, (ii) if the Aggregate DSCR as of such Payment Date is greater than or equal to 1.20
to 1.00 and less than 1.25 to 1.00, then 50%, or (iii) if the Aggregate DSCR as of such Payment Date is
greater than or equal to 1.25 to 1.00, then 25%; (b) if the production tracking rate is less than 80%, then
100%, otherwise 25%; and (c) if the Aggregate LTV is greater than 75%, then 100%, otherwise 25%.
The ABS VII Class A and Class B Notes contain two performance targets. First, we must achieve, and
have certified, a reduction in Scope 1 and Scope 2 GHG emissions intensity of at least 25% on
December 31, 2026 and at least 35% on December 31, 2030. Second, we must achieve, and have certified, a
reduction in methane emissions intensity of at least 30% on December 31, 2026 and of at least 50% on
December 31, 2030. For each of these targets that we fail to meet or fail to have certified by an external
verifier that we have met, by April 30, 2026, the interest rate payable with respect to the ABS VII Class A
and Class B Notes will be increased by 25 basis points. In each case, an independent third-party assurance provider will be required
to certify our performance of the above."
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