Crosstex Energy obtains $1 billion five-year revolving credit facility

By Marisa Wong

Madison, Wis., Feb. 21 - Crosstex Energy, LP entered into a credit agreement on Thursday for an up to $1 billion five-year revolving credit facility that includes a $500 million letter-of-credit subfacility, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent, swingline lender and letter-of-credit issuer under the credit agreement; Bank of America Merrill Lynch, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, RBC Capital Markets and BMO Capital Markets Corp. are joint lead arrangers; Citibank, NA and Wells Fargo Bank, NA are co-syndication agents; and Royal Bank of Canada and Bank of Montreal are co-documentation agents.

Borrowings bear interest at Libor plus an applicable margin based on the partnership's credit rating. The applicable margin ranges from 100 basis points to 175 bps.

There is also a commitment fee that ranges from 10 bps to 35 bps, also based on the company's debt rating.

Crosstex's ability to borrow funds and obtain letters of credit under the new facility is conditioned upon the closing of its planned merger with Devon Energy Corp. and the prior or concurrent termination of its existing credit facility.

In addition, the credit agreement contains financial, operational and legal covenants, including maintaining a ratio of consolidated debt to consolidated EBITDA of no more than 5 to 1.

If the partnership completes one or more acquisitions in which the aggregate purchase price is $50 million or more, the maximum allowed ratio of consolidated debt to consolidated EBITDA will increase to 5.5 to 1 for the quarter of the acquisition and the three following quarters, the filing noted.

Crosstex is a midstream natural gas company based in Dallas.

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