Abraxas Petroleum $310 million credit facility to include term loan

By Sara Rosenberg

New York, Aug. 20 - Abraxas Petroleum Corp.'s proposed $310 million credit facility will include a $10 million term loan due Dec. 31, 2010 in addition to a $300 million revolver, according to a PRER14A filed with the Securities and Exchange Commission on Thursday.

Societe Generale is the administrative agent on the deal and has supplied the company with a non-binding term sheet.

Pricing on the term loan is expected to be Libor plus 575 basis points and pricing on the revolver is expected to range from Libor plus 250 bps to 375 bps based on use. There is a 2% Libor floor.

Covenants will include a current ratio as of the last day of each quarter of not less than 1.00 to 1.00, an interest coverage ratio as of the last day of each quarter of not less than 2.50 to 1.00, and a total net debt to EBITDA ratio as of the last day or each quarter of not more than 4.50 to 1.00 for the quarter ending Sept. 30 through the quarter ending Sept. 30, 2010, and 4.00 to 1.00 thereafter.

The initial availability under the new credit facility is expected to be about $155 million. At close, the company expects to borrow about $140.9 million, of which $130.9 million will be drawn under the revolver and the term loan will be drawn in full.

The facility will be obtained in connection with the company's merger with Abraxas Energy Partners LP.

Proceeds will be used to repay all of Abraxas Petroleum's and Abraxas Energy's outstanding bank debt.

The non-binding term sheet is subject to the lenders due diligence, internal approval process and execution of definitive agreements.

Under the merger agreement, Abraxas Petroleum will acquire all common units of Abraxas Energy that it does not currently hold for $6.00 per common unit payable in shares of common stock.

The number of shares of Abraxas Petroleum common stock will range from 4.25 to 6.00 per common unit of Abraxas Energy and will amount to 26 million to 36 million shares of Abraxas Petroleum common stock.

Closing of the merger is subject to negotiation of the new credit facility, approval by the holders of a majority Abraxas Petroleum's common stock and approval by the holders of 80% of Abraxas Energy's common units.

Abraxas Petroleum is a San Antonio, Texas-based crude oil and natural gas exploration and production company. Abraxas Energy is a San Antonio, Texas-based upstream master limited partnership.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.