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Published on 3/8/2011 in the Prospect News Bank Loan Daily.

MEG Energy launches $1 billion term loan at Libor plus 300 bps

By Sara Rosenberg

New York, March 8 - MEG Energy Corp. launched its $1 billion term loan B on Tuesday with price talk of Libor plus 300 basis points with a 1% Libor floor and a par offer price, according to a market source.

There is 101 soft call protection for one year.

The company's $1.5 billion credit facility also includes a $500 million revolver that is already fully subscribed and therefore not being syndicated with the term loan.

Barclays, Credit Suisse, BMO Capital Markets and Morgan Stanley are the joint bookrunners on the deal, with Barclays the left lead.

Proceeds from the credit facility, along with $500 million of senior notes, will be used to refinance the company's existing revolver, term loan B and term loan D and for general corporate purposes.

Currently, the company's revolver due Jan. 31, 2013 is sized at $200 million, its term loan B due April 3, 2013 is sized at $41.5 million and its term loan D due April 3, 2016 is sized at $957.9 million, according to recent filings with Sedar.

Pricing on the existing revolver is Libor plus 400 bps with a 75 bps unused fee, pricing on the term loan B is Libor plus 200 bps and pricing on the term loan D is Libor plus 400 bps with a 2% Libor floor.

Closing on the credit facility and the notes is expected to occur at the same time.

MEG Energy is a Calgary, Alta.-based oil sands development company.


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