Atlas gets $250 million five-year term loan at Libor plus 900 bps

By Susanna Moon

Chicago, Feb. 23 – Atlas Resource Partners, LP obtained a $250 million five-year second-lien term loan facility Monday, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans will be Libor plus 900 basis points.

Wells Fargo Securities, LLC is the lead arranger and bookrunner. Wilmington Trust, NA is the administrative agent.

The loans will be subordinate to the company’s senior secured credit facility, according to a company press release.

The partnership may prepay the term loan facility at any time and is required to offer to prepay the facility with 100% of the net cash proceeds from the issue or incurrence of any debt and 100% of the excess net cash proceeds from certain asset sales and condemnation recoveries.

The partnership also is required to offer to prepay the term loan upon a change of control.

Prepayments are subject to the following premiums, plus accrued interest:

• A make-whole premium plus all interest that would accrue through the first anniversary date of the term loan, plus an additional amount if the prepayment is optional and funded with proceeds from the issuance of equity, for prepayments made during the first 12 months after the closing date;

• 4.5% of the principal amount prepaid for prepayments made between 12 months and 24 months after the closing date;

• 2.25% of the principal amount prepaid for prepayments made between 24 months and 36 months after the closing date; and

• No premium for prepayments made following 36 months after the closing date.

The partnership’s obligations under the facility are secured on a second-priority basis by security interests in all of the assets of the partnership and each of the partnership’s material restricted subsidiaries that guarantee the partnership’s existing first-lien revolving credit facility, including substantially all personal property of the loan parties and a percentage of the aggregate value attributed to all proved oil and gas properties directly owned by the loan parties. In addition, the obligations under the term loan facility are guaranteed by the partnership’s material restricted subsidiaries.

The term loan matures on Feb. 23, 2020.

“With our substantially improved financial flexibility and liquidity, ARP is now well-positioned to exploit strategic opportunities available in the recent market upheaval, and to grow distributable cash flow for our unitholders,” Edward E. Cohen, the company’s chief executive officer, said in the press release.

Atlas is a Philadelphia-based exploration and production master limited partnership.

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