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Riverstone Credit investing in Seawolf Water Resources

Riverstone Credit Opportunities Income has made a secondary investment in a ‘stapled bundle of private securities’ [this harks back to the old days when paper certificates were literally stapled together] in Seawolf Water Resources. The bundle includes a first lien term loan along with preferred stock and common equity. The aggregate price paid is at a significant discount to market value.

The investment was completed on 26 September 2022. The term loan has a maturity of March 31, 2026 and an estimated all-in yield to maturity on the loan of 10.6% to Riverstone Credit. The preferred stock and common equity are perpetual in nature but benefit from excess cash returned to the shareholders from time to time. Across the term loan, preferred stock and common equity, Riverstone Credit has committed a total of $9.0m. With this investment, the portfolio is nearly 90% committed.

Background

In September 2018, Riverstone Credit led the syndication of a $300m first lien term loan to a water infrastructure services company with operations primarily in Loving County, TX and southern New Mexico. In March 2021, this loan was restructured into a smaller first lien loan, preferred stock and common equity with the former lenders now controlling the company. Recently one of the non-Riverstone Credit syndicate members sought a buyer for their position and Riverstone Credit came to terms to purchase it at an attractive price. In addition, the borrower has agreed to amend the loan to be a sustainability linked loan with a sustainability performance target to be finalised in the near future. Despite the stress experienced during the COVID-19 pandemic, Seawolf today is experiencing some of its best operating and financial results of the past four years.

RCOI : Riverstone Credit investing in Seawolf Water Resources

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