California Resources Corp., the oil explorer spun off by Occidental Petroleum Corp., climbed as much as 33 percent after securing a $1 billion loan to help retire pressing debts.
The Los Angeles-based company’s stock rose 30 percent to $12.23 at 1:58 p.m. in New York after earlier touching $12.49 for the biggest intraday gain since March 4. California Resources has struggled since its December 2014 spinoff from Occidental as crashing oil prices hindered the company’s efforts to cope with a $6 billion debt load that’s 12 times larger than its market value.
Chief Executive Officer Todd Stevens has fired workers and quit paying dividends to conserve cash. On Aug. 5, the company announced a $1 billion first lien secured credit facility with a five-year term. The loan bears an interest rate of Libor plus 10.375 percent a year, subject to a 1 percent Libor floor, according to the statement released after the close of regular U.S. trading on Friday. Goldman Sachs Group Inc. acted as lead arranger.
The loan is secured by the same collateral used on an existing bank group facility, as well as the company’s pipeline and electricity assets, according to the statement.