Linn Energy plans $400 million subordinated term loan for purchase of oil and gas assets

By Sara Rosenberg

New York, Dec. 21 - Linn Energy LLC has received a commitment for a new $400 million subordinated term loan to help fund its acquisition of certain oil and gas properties from Lamamco Drilling Co., company officials said in a conference call Friday.

Pricing on the term loan is Libor plus 500 basis points.

The loan is a six-year facility with an 18-month term, officials remarked, adding that if the term loan is refinanced, it will be with some form of longer-term debt.

Debt to capitalization will be around 45% and debt to EBITDA will be around 3.0 to 3.5 times.

Linn Energy is purchasing assets that are located primarily in the Mid-Continent from Lamamco for a contract price of $552 million, subject to purchase price adjustments.

Other acquisition financing will come from borrowings under the company's existing revolving credit facility.

Closing is expected to take place in early 2008.

Linn Energy is a Houston-based independent oil and gas company.

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