Templar launches $700 million second-lien loan at Libor plus 700 bps

By Sara Rosenberg

New York, Nov. 7 - Templar Energy LLC launched a $700 million seven-year covenant-light senior secured second-lien term loan on Thursday with price talk of Libor plus 700 basis points with a 1% Libor floor and an original issue discount of 98, according to a market source.

The term loan has call protection of 102 in year one and 101 in year two, and no amortization. The loan includes an incremental allowance of $200 million plus the amount of any voluntary prepayments of the term loan plus additional amounts up to 3.75 times secured net leverage, subject to 50 bps MFN with an 18-month sunset, the source said.

Mandatory prepayments are from non-ordinary course asset sales, debt incurrences and swap unwinds, subject to certain conditions.

Expected term loan ratings are B3/B-.

Commitments are due on Nov. 19, allocations are expected on Nov. 21 and closing is targeted for Nov. 25, the source added.

With the term loan, the company is also getting a $300 million reserve-based revolver.

Citigroup Global Markets Inc., BofA Merrill Lynch, Barclays, Morgan Stanley Senior Funding Inc. and Natixis Securities North America Inc. are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of oil and gas assets located in the Texas Panhandle Area from Forest Oil Corp. for $1 billion.

Templar Energy is an Oklahoma City-based exploration and production company.

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