First Eagle Investments Comments on Rex Energy Corp

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Oct 24, 2016

Rex Energy Corporation (NASDAQ:REXX), an oil and gas exploration company with properties concentrated in the Marcellus and Utica shale regions, also benefited from the rally in natural gas. Rex holds leases on good acreage, and it needed to begin production in order to maintain the leaseholds. Seeking to obtain liquidity from alternative sources of capital, it formed joint ventures with certain non-traditional credit investors willing to co-invest and pay a significant portion of the development costs. Rex also engaged in a debt swap that took out a significant portion of its debt and replaced it with an issue paying little cash interest. We believe this gives the company greater flexibility to manage liquidity.

From First Eagle High Yield Fund third-quarter 2016 commentary.