Sugar Land, Texas-CVR Energy Inc. has announced that its wholly-owned subsidiary, Coffeyville Resources, LLC, and J. Aron & Co., have agreed to reduce the notional amount of a funded letter of credit supporting the company’s obligations under an existing cash flow swap from $150 million to $60 million. In connection with an amendment to the cash flow swap agreement executed May 29, 2009, Coffeyville Resources has caused $90 million of the funded letter of credit facility under its credit agreement to be refunded back to the lenders, thereby reducing such facility to $60 million. “We are pleased that the funded letter of credit requirement has been reduced,” said CVR CEO Jack Lipinski. “Based on current rates, the reduction will save the company approximately $5 million in interest costs during the next 12 months.” Effective at the end of June this year, the cash flow swap ramps down from 5.9 million barrels per quarter to 1.5 million barrels per quarter, or about 15 percent of production at the company’s Coffeyville, Kan., petroleum refinery. The remaining obligations under the cash flow swap will be fully satisfied on June 30, 2010.
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