Harbinger Group and EXCO joint venture bank debt to be led by JPMorgan

By Sara Rosenberg

New York, Nov. 13 - The credit facility that is being obtained by the joint venture being created by Harbinger Group Inc. and EXCO Resources Inc. will be led by J.P. Morgan Securities LLC, according to an 8-K filed recently with the Securities and Exchange Commission.

Earlier the companies said that the bank debt would amount to $225 million.

The joint venture is being done to create a private oil and gas limited partnership.

Under the agreement, the joint venture will acquire oil and gas assets in West Texas from EXCO for about $725 million, subject to customary closing adjustments.

In addition to being financed with the loan borrowings, the purchase will be funded by $372.5 million in cash contributed from Harbinger and $127.5 million in oil and gas properties and related assets being contributed by EXCO.

In exchange for its cash investment, Harbinger will receive a 75% limited partnership interest in the venture and a 50% member interest in the general partner of the venture, and in exchange for its asset contribution, EXCO will receive about $597.5 million in cash proceeds as well as a 25% limited partner interest and a 50% member interest in the General Partner.

Closing is expected in early 2013, subject to customary conditions, including title and environmental reviews, receipt of applicable approvals and consents and receipt of bank debt.

Harbinger is a New York-based diversified holding company, and EXCO is a Dallas-based oil and natural gas company.

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