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WHAT WE DO

Madava Financial was founded by industry veterans as a private, energy-focused finance company that provides capital solutions primarily through direct lending to oil and gas producers, midstream operators, and the power companies in the continental US and Canada

Transaction Types

  • Acquisitions
  • Bridge Loans
  • Recapitalizations
  • General Refinancing
  • Growth Capital
  • Dividend Re-Capitalizations

Products

  • Revolvers
  • Senior Term Loans
  • Unitranche Loans
  • Second Lien Loans
  • Preferred Equity
  • HoldCo Debt
  • Volumetric Production Payment
  • ORRI's
  • Net Profits Interests
  • Minority Common Equity

Madava Financial Target Upstream Market

UNITRANCHE FACILITY

Unitranche Facility

  • Secured, first lien that allows for higher leverage than conforming senior bank loans
  • Allows for leverage against assets that may not qualify for conforming bank loan due to well concentration or lack of production history
  • Allows for advances beyond OCC mandated financial tests
  • Sizing is asset based similar to 1L / 2L structures typically with a PDP component
  • Competitive pricing versus other institutional debt providers

Benefits / Considerations

  • Provides more leverage earlier in an assets life cycle

  • Predetermined advances / upsizing based on PDP and proved reserve levels

  • Lower cost of capital vs equity / mezzanine / drillco structures
  • Many deals have a substantial amount of funded equity in place

PREFERRED EQUITY

Preferred Equity

  • Proceeds utilized for development / acquisitions / liquidity
  • Redeemable preferred with mandatory redemptions after ~5 years. Can also accommodate perpetual structures
  • Key protective provisions include anti-layering and leverage limitations
  • Competitive Rates which can be a combination of PIK and cash pay. Some deals may require additional upside via warrants

Benefits / Considerations

  • Attractive versus raising additional common equity in a “down round” when dilution can be prohibitive
  • Could have a positive effect on leverage metrics due to equity treatment by banks for OCC compliance
  • Company usually has a sizable amount of common below the preferred
  • Breach of protective provisions generally results in increased yield or governance

EQUITY CO-INVESTMENT

Common Equity Co-Investment

  • Offered to companies with experienced management, proven track records, and strong sponsor support
  • Deployed into companies where MAF has also provided a debt solution
  • Usually sits in the same class as equity sponsor
  • Can be utilized by companies at the beginning of their “life cycle”
  • Target returns of 20%+ IRR or 2.0x ROI

Benefits / Considerations

  • Covenant free capital that can rank pari passu with sponsor capital commitment

  • Issuing incremental equity can be dilutive to initial investors
1000 Louisiana Street,
69th Floor, Suite 6950
Houston, TX, 77002 US