Quicksilver, Canadian unit set terms on $1 billion-plus borrowing base

By Susanna Moon

Chicago, Dec. 27 - Quicksilver Resources Inc. and its subsidiary amended their credit agreements on Dec. 22 for five-year revolving credit facilities with JPMorgan Chase Bank, NA as global administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The global borrowing base will initially be set at $1.075 billion, with $775 million going to the U.S. borrowing base and $300 million to the Canadian borrowing base.

The global borrowing base and U.S. borrowing base will be reset semiannually based on engineering reports and other appropriate information. At the time of each redetermination, up to 100% of the U.S. borrowing base, less a $50 million minimum retained amount, may be allocated to the Canadian borrowing base.

Interest on the loans will be Libor or CDOR plus 150 basis points to 250 bps, based on borrowing base usage.

The commitment fee is 37.5 bps to 50 bps.

For the Quicksilver U.S. loans, Bank of America, NA is the syndication agent; Deutsche Bank Securities Inc., BNP Paribas and Wells Fargo Bank, NA are co-documentation agents; and J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the bookrunners with a maximum principal amount of $1.25 billion.

The amended U.S. agreement also provides for extending swingline loans to Quicksilver.

At the same time, Quicksilver Resources Canada Inc., a wholly owned subsidiary, entered into an amended and restated credit agreement with JPMorgan Chase Bank, NA, Toronto Branch as administrative agent, Bank of Nova Scotia as syndication agent, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce as co-documentation agents; and J.P. Morgan Securities LLC and Bank of Nova Scotia as bookrunners with a maximum principal amount of $500 million.

The combined credit agreements amend and restate the U.S. credit agreement and Canadian credit agreement, both dated Sept. 6.

Debt under the U.S. agreement is guaranteed by some of Quicksilver's domestic subsidiaries and are secured by 100% of the equity interests of Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc., Cowtown Gas Processing LP and Cowtown Pipeline LP and some oil and gas properties and related assets of Quicksilver.

Borrowings under the Canadian agreement are guaranteed by Quicksilver and the U.S. guarantors, and borrowings under the Canadian agreement are secured by 100% of the oil and gas properties and related assets of Quicksilver Canada and the U.S. collateral.

Original terms

Quicksilver said on Sept. 6 that it closed on a $1.25 billion five-year senior secured revolving credit facility priced at Libor plus 150 bps to 250 bps based on borrowing usage.

The revolver had a borrowing base of $850 million.

In addition, the company got a new C$500 million five-year senior secured revolver with pricing ranging from CDOR plus 175 bps to 275 bps depending on borrowing base usage.

The revolvers are secured on a standalone basis by oil and gas reserves and related assets.

Proceeds were used to refinance credit facilities that carried higher pricing.

Quicksilver Resources is a Fort Worth, Texas-based independent oil and gas company.

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