Goodrich Petroleum Corporation ("GDP") announced that, as a result of a ratings upgrade of The Bear Stearns Companies, Inc. ("BSC") debt by Standard and Poors ("S&P") on March 24, 2008, its obligation to transfer its rights and obligations under the Capped Call Agreement entered into in December 2007 to an entity with a higher credit rating has been cured. With the upgrade, The Bear Stearns Companies, Inc.'s credit ratings stood at Baa1 by Moody's and AA- by S&P as of that date.
To recap the provisions of the two agreements discussed in its press release dated March 20, 2008, the Share Lending Agreement (SLA) requires collateral to be posted by an affiliate of Bear Stearns if its credit rating is below either A3 by Moody's or A- by S&P. Thus, as of this date, the collateral requirement is still in place, and is marked to market on a daily basis depending on the value of GDP shares at the close of each day's trading. The Capped Call Agreement requires an affiliate of BSC to transfer its rights and obligations within 30 days if its credit rating is below either Baa1 by Moody's or BBB+ by S&P. Thus the recent upgrade by S&P eliminated this requirement as of March 24, 2008.
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