Magnum Hunter amends revolver to increase size, extend maturity and reduce rate

By Sara Rosenberg

New York, May 3 - Magnum Hunter Resources Inc. amended its senior revolving credit facility to increase the borrowing base to $275 million from $250 million, extend the maturity by more than one year to May 2006 and reduce the interest rate by 25 basis points. Furthermore, two new financial institutions have been named as co-agents on the deal, according to a company news release.

Deutsche Bank Trust Co. Americas is the administrative and collateral agent, Bank of America and Bank of Montreal are co-syndication agents, BNP Paribas is documentation agent, and Fortis Capital Corp., Bank of Scotland, and Bank of Nova Scotia are lead managers.

"We are very pleased that our bank group has agreed to increase our borrowing capacity, extend the maturity date of our revolving credit until May 2006, and lowered the interest rate margin," said Chris Tong, senior vice president and chief financial officer, in the release. "While we do not anticipate needing to use the additional $20 million in borrowing capacity at this time, it does increase our unused availability under our line of credit to approximately $123 million, which provides us with greater liquidity and financial flexibility.

"In addition, the reduction in our interest rate margin will save us almost $400,000 per year in interest expense. This coupled with the retirement of our $140 million 10% senior notes, which was completed at year-end 2003, saves Magnum Hunter over $10 million per year.

"These modifications are reflective of our improved financial condition, which we have diligently been working toward over the last several years. We are appreciative of the support and positive working relationship that we have established with our eighteen member bank group."

Magnum Hunter is an Irving, Texas, independent energy company.

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