The waiver of the Current Ratio default and authorization of $100M junior lien capacity provides near-term liquidity relief, but the company is clearly under financial stress — evidenced by multiple prior amendments (now Amendment No. 9) and a covenant breach. Monitor for any issuance of the Junior Lien Notes as a potential catalyst for the preferred equity, and track the Capital Raise Ratio which must stay above 0.65:1.00 to permit further debt-funded activities.
Price Chart
Executive Summary
Phoenix Energy One entered into Amendment No. 9 to its senior secured credit agreement, which waives an existing Event of Default (Current Ratio covenant breach) and permits the issuance of up to $100,000,000 in junior lien notes, subject to conditions including a Junior Lien Intercreditor Agreement. The filing also amends financial covenants for the Asset Coverage Ratio and Current Ratio, and imposes a minimum Capital Raise Ratio requirement for certain transactions.
Key Financial Metrics
Key Facts
- Amendment No. 9 to the senior secured credit agreement was executed on June 1, 2026.
- The amendment permits the company to issue up to $100,000,000 in Junior Lien Notes, secured by junior-liens on Permitted Junior Lien Collateral and subordinated to the existing senior secured lenders via a new Junior Lien Intercreditor Agreement.
- The Lenders waived a Specified Default under Section 10.01(d) of the Credit Agreement: the Company failed to maintain a Current Ratio of at least 0.80:1.00 during calendar months ending between November 30, 2024 and March 31, 2026.
- The amendment amended the Asset Coverage Ratio covenant: for fiscal quarters ending March 31, 2026 and June 30, 2026, the minimum ratio is now 1.50:1.00, and for the fiscal quarter ending June 30, 2026 it will be 1.40:1.00.
- The amendment added a new financial condition called 'Capital Raise Ratio' — at least 0.65:1.00 — required for various transactions including certain acquisitions, redemptions, and the issuance of Junior Lien Notes.
- The amendment requested a certificate from a Responsible Officer certifying that since December 31, 2024, no Material Adverse Effect has occurred.
- The amendment modifies the drilling rig operations limit: the maximum number of rigs reduces from 3 to 2 if the company is not in compliance with the financial covenants on or after the Amendment No. 9 Effective Date.
- A new Schedule 1.02(g) (Permitted Junior Lien Collateral) was added.
- The amendment adds a definition limiting 'Specified Additional Bond Indebtedness' redemption features to Permitted Bond Repurchases.
- Adam Ferrari personally guaranteed as Specified Additional Guarantor.
Financial Impact
Credit facility amendment authorizes up to $100M in junior lien notes. The company was in default of its minimum Current Ratio (0.80:1.00) covenant — the waiver preserves access to the existing $100M+ senior secured facility. New financial covenant thresholds for Asset Coverage Ratio are lowered to 1.40:1.00 (June 2026 quarter) from prior thresholds, providing some covenant relief.
Risk Factors
- The company has a history of repeated credit agreement amendments (9th amendment) and was in default — signaling ongoing liquidity or operational stress.
- The new Asset Coverage Ratio covenant will tighten further after June 2026 (rising to 1.70:1.00 and then 2.00:1.00) — risk of future covenant breach if reserves decline.
- Junior Lien Notes add $100M of subordinated debt — while they provide capital, they increase total leverage and could pressure the preferred security.
- Adam Ferrari's personal guarantee exposes key-man risk.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-252461 |
| Document: ck0001818643-20260601.htm | 0001193125-26-252461 |
| Document: 0001193125-26-252461-index-headers.html | 0001193125-26-252461 |
| Document: 0001193125-26-252461-index.html | 0001193125-26-252461 |
| Document: 0001193125-26-252461.txt | 0001193125-26-252461 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 22, 2026 4d ago | S-1 | $25.10 $25.75 | ▼ −2.59% | ▼ −1.88% | $25.35 (−1.00%) |
Oct 22, 2026 4d ago | 8-K | $25.10 $25.75 | ▼ −2.59% | ▼ −1.88% | $25.35 (−1.00%) |
Aug 17, 2026 10w ago | Court Ruling | $23.83 $24.03 | ▲ +0.84% | ▲ +0.63% | $25.35 (+6.37%) |
Jul 8, 2026 15w ago | EFFECT | $24.16 $24.18 | ▲ +0.10% | ▼ −0.74% | $25.35 (+4.95%) |
Jun 25, 2026 17w ago | S-1/A | $24.95 $25.10 | ▲ +0.60% | ▼ −1.05% | $25.35 (+1.60%) |
Jun 2, 2026 20w ago | S-1 | $23.99 $24.16 | ▲ +0.70% | ▲ +0.30% | $25.35 (+5.66%) |
Jun 2, 2026 21w ago | 8-K | $23.93 $23.99 | ▲ +0.28% | ▲ +1.01% | $25.35 (+5.96%) |
US Market Status
Subscribe to SecBot
Get Real-Time SEC Filing Intelligence
Comprehensive SEC filing analysis delivered the moment filings hit EDGAR. Sentiment scoring, impact analysis, and actionable insights for every material event.
Create a free account Live analysis, Telegram alerts, watchlists and the MCP server for subscribers