Exco sets Sept. 6 general syndication launch for $1.5 billion credit facility

By Sara Rosenberg

New York, Aug. 17 - Exco Resources Inc. has scheduled a general syndication bank meeting for Sept. 6 to launch its proposed $1.5 billion senior secured credit facility, a company spokesman told Prospect News on Thursday.

The facility consists of a $750 million five-year second-lien term loan expected in the Libor plus 350 to 400 basis points area and a $750 million four-year revolving credit facility with pricing ranging from Libor plus 100 to 175 basis points based on utilization, the spokesman said.

As was previously reported, Exco started presenting the second-lien term loan to some potential investors on Wednesday of this week. Those presentations, however, are one-on-one's that are taking place with a select group of lenders, the spokesman explained.

The revolver was already launched to senior managing agents in late July.

JPMorgan and Credit Suisse are leading the second-lien term loan, with JPMorgan the left lead. JPMorgan is the lead bank on the revolver.

The credit facility is actually being borrowed by a wholly owned unrestricted subsidiary of Exco to fund the acquisition of Winchester Energy Co. Ltd. from Progress Energy Inc. for $1.2 billion in cash, subject to purchase price adjustments. The debt will be non-recourse to Exco.

Credit statistics for the transaction include first-lien net debt to EBITDA of 2.5x and net debt to EBITDA of 5.4x.

Exco's existing amended and restated revolving credit facility will remain in place following this transaction.

The acquisition is expected to close on Oct. 2, subject to customary conditions to closing and governmental clearance.

Exco is Dallas-based independent energy company.

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