RAM Replaces Credit Facility

RAM Energy has entered into a new $250 million Revolving Credit Facility and a $75 million Term Loan Facility on March 15, 2011, replacing its previous maturing credit facility. SunTrust Robinson Humphrey is the agent for the revolving facility, and Guggenheim Corporate Funding LLC is the agent for the term loan facility. The borrowing base of the new facility was initially set at $150 million versus its previous level of $145 million under the prior facility. All such funds advanced under the revolving facility can be paid down and re-borrowed during the five-year term of the revolver.

The revolver will initially bear interest at LIBOR plus a margin of 3.25%, which can range between 2.5% to 3.25% depending on the percentage of borrowing base used. Similarly, the term loan portion of the credit facility initially provides for payments of interest only during its five and one-half year term, with the initial interest rate of LIBOR plus 9.0% with a 2% LIBOR floor. RAM anticipates an initial blended interest rate of approximately 7.0% on its existing outstanding borrowings, in contrast to the average blended interest rate of 8.0% for 2010. Assuming the current business plan and the new blended interest cost, cash interest costs for the remainder of 2011 should be approximately $1.3 million lower.

"With the improvement in RAM's balance sheet following the sale of non-core natural gas properties late in 2010, our 2011 non-acquisition capital budget of $35.0 million, combined with the successful replacement of the previous maturing credit facility with our new, more traditional first and second lien credit facilities, we are substantially repositioned to grow the company and improve shareholder value," said Larry Lee, CEO.


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