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

The tools to build the balance sheet

Senior Debt
/ Unitranche

Subordinated
Capital

Minority Equity
Co-investment


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