Gastar obtains $250 million term loan via Ares, will repay revolver

By Tali Rackner

Norfolk, Va., Feb. 17 – Gastar Exploration Inc. obtained a $250 million first-lien secured term loan from Ares Management, LP, according to an 8-K filing with the Securities and Exchange Commission.

The term loan will mature on March 1, 2022 and will bear interest at 8.5% per annum, payable quarterly.

Loan proceeds, along with proceeds from a private placement of convertible notes and common stock to Ares, will be used to fully repay and redeem Gastar’s existing $70.4 million revolving credit facility and its $325 million senior secured notes due May 2018.

The loan will be secured by a first-priority lien on substantially all of the assets of the company and will include covenants restricting the company’s ability to incur debt, grant liens, pay dividends, engage in transactions with affiliates and other customary covenants of a credit facility of its type.

Gastar Exploration is an energy company based in Houston.

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