Magnum Hunter Closes Expanded Credit Facilities
Magnum Hunter has closed on the previously announced expansion of its Senior Bank Credit Facilities in the amount of $267.5 million. The expansion of the Credit Facilities includes a new Term Loan Facility (the "Term Loan Facility") of $100 million along with the Company's existing Senior Revolving Credit Facility (the "Senior Revolving Facility") which has been resized to $167.5 million. The Term Loan Facility was increased from the previously announced $75 million to $100 million due to demand from the Company's existing bank group. In addition, the Revolving Credit Facility can increase from $167.5 million up to $250 million, subject to semi-annual borrowing base redeterminations and requisite lender approval, providing the Company's total potential borrowing capacity of up $350 million under the combined Credit Facilities.
The Term Loan Facility will have a maturity of five years and an initial interest rate of LIBOR (subject to floor of 1.00%) plus 7.00%. The Company can redeem the Term Loan Facility during the first 12 months with no prepayment penalty. The terms under the Revolving Credit Facility will remain substantially the same with the interest rate at LIBOR plus 2.25% to LIBOR plus 3.25%, depending on the amount drawn at any given time on the Revolving Credit Facility. Complete terms and conditions under the Term Loan Facility and Revolving Credit Facility will be reported on appropriate Form 8-K's to be filed with the Securities and Exchange Commission.
As of September 29th, the Company had total liquidity of approximately $140 million including cash and availability under these Credit Facilities and its Eureka Hunter Credit Facility.
Bank of Montreal serves as the "Administrative Agent" under the Revolving Credit Facility, with Capital One, N.A. serving as the "Syndication Agent," and Amegy Bank National Association, KeyBank National Association and UBS Securities LLC serving as "Documentation Agents." BMO Capital Markets also serves as "Lead Arranger" and "Sole Bookrunner." Participating banks include Citibank, N.A., Credit Suisse AG, Deutsche Bank Trust Company Americas, Goldman Sachs Bank USA, SunTrust Bank, and Union Bank, N.A.
BMO Capital Markets and Capital One, N.A. serve as "Joint Lead Arrangers" and "Joint Bookrunners" on the Term Loan Facility. Capital One, N.A. serves as the "Administrative Agent," with Bank of Montreal serving as the "Syndication Agent," and Citibank, N.A. serving as "Documentation Agent." Participating banks include Credit Suisse AG, Deutsche Bank Trust Company Americas, SunTust Bank, and Union Bank, N.A.
Mr. Gary C. Evans, Chairman and Chief Executive Officer of Magnum Hunter, commented, "We are very pleased to announce the final closing of these expanded Credit Facilities which substantially improve our overall liquidity. The demand from our existing bank group was sufficient to allow the expansion of credit by another $25 million than what was originally planned. These combined Credit Facilities will fund our capital budget for the remainder of 2011 and all of 2012. Our goal is to be self funding through cash flow for our capital budget requirements in fiscal year 2013. In addition, the structure of the Term Loan Facility with no pre-payment penalty during the first 12 months, allows us maximum flexibility in structuring our future financial plans."
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