Magnum Hunter gets $6.5 million term loan from revolver lenders

By Angela McDaniels

Tacoma, Wash., Dec. 6 - Magnum Hunter Resources Corp. said the lenders under its $150 million senior secured revolving credit facility provided a $6.5 million tranche B term loan to the company on Nov. 30.

The term loan carries a coupon of 5.5% and matures on Nov. 30, 2011, according to an 8-K filing with the Securities and Exchange Commission.

The tranche A portion of the company's borrowing base was reset at $65 million due to the recent sale of the company's Cinco Terry properties, and the tranche B portion was set at $6.5 million for a total borrowing base of $71.5 million.

Prior to the tranche B maturity date, any increase made in the tranche A portion of the borrowing base that results in the tranche A portion exceeding $65 million will automatically and permanently reduce the tranche B portion by the amount of the tranche A increase.

Also, the tranche B portion of the borrowing base will be automatically and permanently reduced by a specified percentage of any proceeds from the sale of certain capital assets, or from the issuance of certain debt, relating to the company's Eureka Hunter Pipeline.

The company also amended the credit facility to adjust the annualization of the calculation of its EBITDAX for the quarters ending Dec. 31, March 31 and June 30, 2011.

The proceeds from the new term loan will be used to fund the company's development of the Eureka Hunter Pipeline.

Bank of Montreal is the administrative agent.

Magnum Hunter is a Houston-based natural gas and crude oil company.

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