Deutsche Bank launched syndication of a $500 million credit for Magnum Hunter Resources last week after landing the lead role amid stiff competition from other banks. The new credit facility partially funds the merger with Prize Energy and refinances the existing credit lines of both companies, said a source, who declined to name the other banks bidding for the role. Pricing is LIBOR plus 21/ 4% on the three-year line, said a banker. Chris Tong, Magnum's senior v.p. and cfo, did not return calls by press time. Magnum is an independent exploration and development company involved in the crude oil and natural gas markets.
Deutsche Bank leads the incumbent Magnum line, which will be amended to increase the borrowing base from $160 million to the $500 million level. Last fall, Magnum increased the borrowing level from $35 million to $160 million by acquiring oil and gas properties in New Mexico that acted as collateral (LMW, 10/7). The addition of three new banks, Credit Agricole Indosuez, ABB Energy Capital and Hibernia National Bank also enabled the increase. Officials at Deutsche Bank declined comment.