American Energy – Marcellus reveals talk on $1.2 billion term loans

By Sara Rosenberg

New York, June 24 – American Energy – Marcellus LLC released price talk on its $1.2 billion of senior secured term loans in connection with its bank meeting on Tuesday, according to a market source.

The $750 million six-year first-lien covenant-light term loan is talked at Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99, and the $450 million seven-year second-lien covenant-light term loan is talked at Libor plus 800 bps with a 1% Libor floor and a discount of 98, the source said.

Included in the first-lien term loan is 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

The first-lien term loan has an up to $275 million accordion subject to pro forma first-lien secured leverage of 3.5 times, provided that up to $150 million of incremental commitments may be issued as a revolver without being subject to the ratio test, plus unlimited amounts such that pro forma first-lien net leverage is 3 times. The accordion is subject to 50 bps MFN for 18 months.

The second-lien loan accordion is $250 million plus unlimited amounts such that pro forma secured net leverage is 4 times, subject to 50 bps MFN for 18 months.

Commitments are due at 5 p.m. ET on July 8, the source added.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are the lead banks on the deal.

Proceeds will be used to fund the acquisition of about 48,000 net acres of leasehold in Doddridge, Harrison, Marion, Tyler and Wetzel Counties, W.Va., from East Resources Inc. and an unnamed private company, and $300 million of the first-lien term loan will be used to fund a capital expenditures reserve account.

At closing, the properties are expected to have net production of around 135 mmcfe per day.

Closing is expected on Aug. 4.

American Energy – Marcellus is an American Energy Partners LP platform company. Oklahoma City-based American Energy Partners was founded by Aubrey K. McClendon in April 2013 to capitalize on opportunities available in unconventional resource plays onshore in the United States.

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