Magnum Hunter Resources has launched the retail round of its $275 million loan backing its merger with Prize Energy. The company has wrapped a successful bond offering and managing agent round and this is the final piece to be completed. According to a banker familiar with the situation, four banks have come in at the senior managing agent level, in addition to leads Deutsche Bank, CIBC World Markets and BNP Paribas. Pricing on the three-year borrowing-base facility is LIBOR plus 2 1/4%, but the borrowing base transaction still carries too low a spread to be of interest to non-bank players, according to the banker.
The bond offering part of the deal was upsized from $250 million to $300 million, with approximately $2 billion of orders received, according to Chris Tong, senior v.p. and cfo (LMW, 3/25). Pricing was originally higher on the bonds, but after conferring with the banks Magnum settled on an annual rate of 9.6%, Tong explained.