Diversified Energy Company
05/19/2026 | Press release | Distributed by Public on 05/19/2026 06:27
Material Agreement, Financial Obligation (Form 8-K)
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Item 1.01
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Entry into a Material Definitive Agreement
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On May 13, 2026, DP Red River LLC (the "Issuer"), a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of Diversified Energy Company (the "Company"), issued in a private offering (the "Offering") $850 million in aggregate principal amount of fixed-rate asset-backed securities, consisting of $590 million principal amount of 6.016% Class A-1 Notes due 2046 and $260 million in principal amount of 6.910% Class A-2 Notes due 2046 (collectively, the "ABS XII Notes") pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended (the "Securities Act").
The ABS XII Notes were issued under a Base Indenture (the "Base Indenture") and related Series 2026-1 Supplement (the "Supplement" and together with the Base Indenture, the "Indenture") each dated May 13, 2026, by and between the Issuer, the guarantors named therein (the "Guarantors"), and UMB Bank, N.A., as Indenture Trustee (the "Trustee") and are guaranteed by the Guarantors, which are also limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company.
The net proceeds from the Offering were used (i) to redeem in full the outstanding (A) Series 2023-1, Class A-1 8.121% Notes, (B) Series 2023-1, Class A-2 8.946% Notes and (C) Series 2023-1, Class B 12.436% Notes, each due 2038 (the "ABS Maverick Notes") and 7.50% Class A Notes due 2039 (the "ABS VI Notes" and together with the ABS Maverick Notes, the "Existing Notes"), (ii) pay any related premiums, fees and expenses, including accrued and unpaid interest on the Existing Notes and the initial deposit of the liquidity reserve amount for the ABS XII Notes, and (iii) for general corporate purposes.
The ABS XII Notes have an expected repayment date in May 2031 (the "Anticipated Repayment Date") and a legal final maturity in May 2046, with both principal and interest payable monthly.
The ABS XII Notes are primarily secured by specific upstream producing assets in the Western Anadarko Basin in Texas and Oklahoma that previously served as collateral for the Existing Notes.
The ABS XII Notes, via the Indenture and related documentation, are governed by a series of covenants and restrictions typical for such transactions, including (i) the requirement for the Issuer to maintain a specified reserve account to ensure the payment of interest, (ii) provisions for optional and mandatory prepayments and specified make-whole payments under certain conditions, (iii) covenants related to recordkeeping, access to information and similar matters, and (iv) compliance with all applicable laws and regulations.
The ABS XII Notes are also subject to customary accelerated amortization events as outlined in the Indenture, which events include failure to maintain specified debt service coverage and loan to value ratios, failure to meet certain production metrics, certain management services agreement termination events, non-compliance with hedging requirements, the failure to repay or refinance the ABS XII Notes by the Anticipated Repayment Date and other events of default. The ABS XII notes are also subject to a customary increase in coupon if not repaid or refinanced by the Anticipated Repayment Date.
Additionally, the ABS XII Notes are subject to customary events of default, which include non-payment of required interest, principal, or other amounts due, failure to comply with covenants within specified time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and failure of the ABS XII Notes to be redeemed upon a change in control event.
The foregoing summaries do not purport to be complete and are subject to, and qualified in their entirety by reference to, the complete copies of the Indenture and the Supplement, which have been filed as Exhibits 4.1 and 4.2, respectively, hereto and are hereby incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Diversified Energy Company published this content on May 19, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 19, 2026 at 12:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]