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American Energy – Marcellus cuts spread on first-, second-lien loans
By Sara Rosenberg
New York, July 7 – American Energy – Marcellus LLC reduced pricing on its $750 million six-year first-lien covenant-light term loan (Ba3/B-) to Libor plus 425 basis points from Libor plus 450 bps and reduced pricing on its $450 million seven-year second-lien covenant-light term loan (Caa1/CCC) to Libor plus 750 bps from Libor plus 800 bps, according to a market source.
Also, the original issue discount on the first-lien term loan was revised to 99½ from 99, and the discount on the second-lien term loan was changed to 98½ from 98, the source said.
As before, both term loans have a 1% Libor floor, the first-lien term loan has 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.
Commitments continue to be due at 5 p.m. ET on Tuesday.
Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are the lead banks on the $1.2 billion of senior secured term loans.
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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