Vanguard Posts $1.5B Amended Credit Facility

Vanguard has entered into an amended $1.5 billion senior secured revolving credit facility with an initial borrowing base of $765 million, with Citigroup as administrative agent, co-lead arranger and sole bookrunner and BNP Paribas as co-lead arranger and co-syndication agent. The amended five year credit facility is predicated upon the successful consummation of the previously announced merger between Encore Energy Partners and Vanguard. In addition to extending the maturity of the facility by five years, several key covenant limitations were amended to provide Vanguard greater flexibility including increasing the percentage of production that can be hedged into the future, increasing the permitted debt to EBITDA coverage ratio from 3.5x to 4.0x, eliminating the required interest coverage ratio, eliminating the ten percent liquidity requirement to pay distributions to unitholders, and allowing for unsecured debt. Also, a new interest rate pricing grid will lower Vanguard's cost of bank debt by half a percent.

Mr. Richard Robert, Executive Vice President and CFO, commented, "We are very pleased to have this amended credit facility completed and appreciate the support of our new bank group. It was particularly satisfying to have such broad support from banks that we had not done business with in the past. Our bank syndicate will increase from seven banks to twenty banks and our borrowing base will increase from $265 million to $765 million assuming the successful completion of the previously announced merger with Encore. With twenty banks in the syndicate, we are confident that they will be able to support our growth into the future."

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