hassuspended its distributions in favor of repurchasing outstanding senior notes.
Thedistribution suspension is effective immediately, the partnership said in anApril 27 news release. EV Energy Partners was authorized to use up to $35million of balance sheet cash or available borrowing capacity to repurchasesenior notes at a discount, but the authorized amount would be reduced dollarfor dollar by any distribution paid out for the remainder of 2016.
Theauthorization was part of an amendment to its senior secured credit facilitysigned in early April. The partnership has repurchased $72.9 million ofoutstanding senior notes so far, paid for with $30.1 million in cash, representinga price to par of 41.2% plus accrued interest.
"Suspendingour distribution was a difficult decision for management and the board to make.However, we believe we are creating more long term value for the companythrough the repurchase of senior notes at such a substantial discount to par.These 2016 repurchases have reduced total debt by $42.8 million and annualinterest expense by $4.8 million," said Michael Mercer, president and CEOof EV Energy Partners.
Thepartnership has $285 million outstanding under its credit facility and aborrowing base of $450 million, as well as total debt outstanding of $638million, according to the release.