Of the two loans there is the RBL and the second lien.
My understanding is that the RBL is substantially cheaper? With Floating Libor + a maximum of 325 bps.
However, the second lien loan cannot be paid down early without refinancing/paying the loan out.
If I am correct, then to pay down the debt we are only paying down the lower interest loan. If this is the case, we are only getting a 5-6% return on the first $105 million of debt reduction.
Is there a breaking cost associated with paying out the second lien loan, via a combination of increasing the RBL loan and cash accumulated from operation before the April 2023 maturity?