A subsidiary of global reinsurance giant Munich Re, Munich Re Reserve Risk Financing, Inc., has announced the completion of a $200 million securitized financing with Diversified Gas & Oil plc, a U.S. domiciled owner and operator of natural gas, natural gas liquids, oil wells, and midstream assets.
Under the terms of the transaction, which is being 100% funded by Munich Re, the reinsurer also provided necessary commodity price hedges.
The deal is Diversified Gas & Oil’s first securitized financing and the notes have been assigned a BBB- investment grade rating from both Fitch and Morningstar.
Commenting on the transaction, George Carrick, President of Munich Re Reserve Risk Financing, Inc., said: “A financing of this type requires a combination of operator capability and quality long-lived reserves. DGOC, an efficient consolidator and operator of long-lived producing natural gas reserves, was uniquely positioned to avail itself of this structure.
“We are pleased to partner with such an innovative company and provide a creative capital and hedge solution. We look forward to supporting DGOC’s continued growth.”
Rusty Hutson, Jr., Chief Executive Officer (CEO) of Diversified Gas & Oil plc, added: “Our new securitized financing structure provides DGOC with access to a high-quality capital base and allows the company to diversify and enhance the duration of our debt capital structure while simultaneously enhancing liquidity.
“MRRF’s flexibility, unique approach to upstream financing, and combination of funding and hedging capabilities all proved instrumental in successfully executing this transaction.”
