Linn Energy LLC (NASDAQ:LINE) (“LINN” or “Company”) and LinnCo LLC (NASDAQ:LNCO) announced that LINN and Berry Petroleum Company, LLC (“Berry”) made interest payments on April 14, 2016 of approximately $30 million on LINN’s 7.75% senior notes due February 2021, $12 million on LINN’s 6.50% senior notes due September 2021 and approximately $18 million on Berry’s senior notes due September 2022 within the applicable 30-day period provided in the indentures governing the notes, for which payment had been previously deferred from the original due date of March 15, 2016.

Strategic Alternatives Related to the Company’s Capital Structure

As previously announced, the Company is currently in the process of exploring strategic alternatives to strengthen its balance sheet and maximize the value of the Company and has engaged its financial and legal advisors along with its lenders in discussions on how to best reduce the Company’s debt and ensure its long-term liquidity needs are met, including the possibility of restructuring under a chapter 11 plan of reorganization.

As part of this process, LINN and Berry intend to elect to exercise the 30-day grace period with respect to an interest payment due April 15, 2016 of approximately $31 million on LINN’s 8.625% senior notes due April 2020 and interest payments due May 1, 2016 of approximately $18.2 million on LINN’s 6.25% senior notes due May 2019 and approximately $8.8 million on Berry’s 6.75% senior notes due November 2020. If LINN fails to make the interest payments within the applicable 30-day grace period and is otherwise unable to obtain a waiver or other suitable relief from the holders under the indentures governing the senior notes prior to the expiration of the 30-day grace period, the resulting default under the applicable indenture will mature into an event of default, allowing the noteholders to elect to accelerate the outstanding indebtedness under the senior notes.

Amendments to Credit Facilities

On April 12, 2016, LINN entered into the Eighth Amendment to its Sixth Amended and Restated Credit Agreement among LINN, Wells Fargo Bank, NA, as administrative agent (the “Agent”), and the lenders party thereto. The Eighth Amendment provides:

  • An agreement that certain specified events will not become defaults or events of default until May 11, 2016;
  • The borrowing base will remain constant until May 11, 2016, subject to reductions based on sales of assets or termination of hedge agreements; and
  • LINN, the Agent and the lenders will negotiate in good faith an agreement in furtherance of a restructuring of the capital structure of LINN.

In addition, on April 12, 2016 Berry entered into the Twelfth Amendment to its Second Amended and Restated Credit Agreement among Berry, Wells Fargo Bank, NA, as administrative agent (the “Berry Agent”), and the lenders party thereto. The Twelfth Amendment provides:

  • An agreement that certain specified events will not become defaults or events of default until May 11, 2016;
  • The borrowing base will remain constant until May 11, 2016, subject to reductions based on sales of assets or termination of hedge agreements; and
  • Berry will have access to $45 million in cash that is currently restricted in order to fund ordinary course operations; and
  • Berry, the Berry Agent and the lenders will negotiate in good faith an agreement in furtherance of a restructuring of the capital structure of Berry (Original Source)

Shares of Linn Energy closed yesterday at $0.358, down $0.07 or -16.74%. LINE has a 1-year high of $14.21 and a 1-year low of $0.26. The stock’s 50-day moving average is $0.63 and its 200-day moving average is $1.48.

On the ratings front, Linn Energy has been the subject of a number of recent research reports. In a report issued on February 18, Wells Fargo analyst Praneeth Satish downgraded LINE to Sell, with a price target of $0.50, which implies an upside of 39.7% from current levels. Separately, on February 12, Citigroup’s Faisel Khan downgraded the stock to Sell .

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Praneeth Satish and Faisel Khan have a total average return of -33.8% and 10.6% respectively. Satish has a success rate of 25.0% and is ranked #3700 out of 3798 analysts, while Khan has a success rate of 74.0% and is ranked #363.

Linn Energy, LLC is a oil and natural gas company, which engages in development, exploitation and acquisition of natural gas. It seeks to be the operator of its properties so that it can develop drilling programs and projects. The company was founded by Michael C. Linn on March 14, 2003 and is headquartered in Houston, TX.