Gavilan launches $500 million second-lien loan at Libor plus 650 bps

By Sara Rosenberg

New York, Feb. 8 – Gavilan Resources LLC launched on Wednesday its up to $500 million second-lien term loan with price talk of Libor plus 650 basis points with a 1% Libor floor and an original issue discount of 98.5, according to a market source.

The term loan is non-callable for one year, then at 102 in year two and 101 in year three, the source said.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used to help fund the acquisition by Sanchez Energy Corp. and Blackstone Energy Partners of Anadarko Petroleum Corp.’s working interest in around 318,000 gross operated acres in the Western Eagle Ford for about $2.3 billion, subject to normal and customary closing conditions and purchase price adjustments.

Closing is expected this quarter, subject to customary conditions.

At the end of the fourth quarter of 2016, sales volumes from the properties being acquired totaled about 45,000 barrels of liquids per day and around 131 million cubic feet of natural gas per day.

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