Osum Production ups spread on $210 million loan to Libor plus 550 bps

By Sara Rosenberg

New York, July 28 – Osum Production Corp. raised pricing on its $210 million six-year senior secured first-lien term loan (B3/B+) to Libor plus 550 basis points from Libor plus 500 bps, according to a market source.

Furthermore, the original issue discount on the loan was changed to 98½ from 99, the source said.

As before, the term loan has a 1% Libor floor and soft call protection of 102 in year one and 101 in year two.

The incremental allowance remained at $50 million and the maximum principal amount that would permit the borrower to be in pro forma compliance with the loan’s financial covenant, however a condition was added that in order to make an accordion draw, the corporate family ratings are not downgraded below the closing rating level as a result of the incremental draw, the source continued.

Recommitments are due by 5 p.m. ET on Tuesday, the source added.

Barclays and Goldman Sachs Bank USA are the bookrunners on the deal.

Proceeds will be used to help fund the acquisition of Orion Oil Sands Project from Shell Canada for C$325 million.

Other funds for the transaction will come from cash on hand as well as from existing shareholders.

Secured and total leverage is 2.7 times.

Osum Production is an indirectly wholly owned subsidiary of Osum Oil Sands Corp., a Calgary, Alta.-based private oil sands company.

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