Kodiak amends facilities, gets $650 million bridge loan commitment

By Sara Rosenberg

New York, Nov. 14 - Kodiak Oil & Gas Corp. amended its first- and second-lien credit facilities on Monday, allowing for the issuance of notes, and the company also obtained a commitment for a $650 million bridge loan, according to an 8-K filed with the Securities and Exchange Commission.

The bridge loan, led by Credit Suisse, WF Investment Holdings LLC, KBCM Bridge LLC and Royal Bank of Canada, is expected to be replaced by concurrent offerings of $550 million of senior notes and the sale of 37.5 million shares of common stock.

Proceeds from the bridge or notes/stock will be used to fund the acquisition of interests in roughly 50,000 net acres of oil and gas properties in the Williston Basin, N.D., repay a portion of the company's first-lien bank debt and all of its second-lien loan, fund capital expenditures and for general corporate purposes.

The company's credit facilities amendment also excludes the issuance of the notes from the automatic borrowing base adjustment trigger.

Additionally, the first-lien amendment revises the total funded debt to EBITDAX ratio upon completion of the Williston Basin acquisition to 4.75 to 1.0 at Dec. 31 and March 31, 2012, 4.50 to 1.0 at June 30, 2012, 4.25 to 1.0 at Sept. 30, 2012 and 4.0 to 1.0 thereafter.

Furthermore, both facilities were revised to allow for the drawing of the bridge loan if the $100 million second-lien credit facility is paid in full.

Wells Fargo is the administrative agent on the first- and second-lien credit agreements.

On Monday, the company drew down $30 million under its first-lien facility and deposited those funds into escrow to be credited to the purchase price on completion of the acquisition.

Kodiak is a Denver-based independent energy exploration and development company.

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