JPMorgan has committed over $2 billion in debt financing to EXCO Resources, according to a filing with the Securities and Exchange Commission. EXCO announced Dec. 26 it is acquiring oil and gas properties, acreage and other assets from Anadarko Petroleum for approximately $1.6 billion in cash. The company lined up $2.045 billion of financing to use to fund potential the acquisition, including a $1.5 billion senior secured revolver and a $545 million bridge facility. The company is developing a deleveraging strategy and is considering alternate financing plans for the acquisition. Leverage could not be determined. Stephen Smith, EXCO president, declined to comment on what other plans the company may be considering are, but said it would be making a decision toward the end of the month. "We've got the financing to close the deal and that's the main thing," he said.
Dallas-based EXCO has tapped JPMorgan in the past to fund acquisitions, Smith said. It hit up JPMorgan and Credit Suisse last September for a $650 million term loan for its acquisition of entities from Progress Energy (CIN 9/29). Standard & Poor's placed EXCO's ratings on CreditWatch with negative implications after the announcement of the acquisition due to the possible high debt burden, which could weaken the company's credit measures.
Anadarko, based in Houston, tapped the bank market last July for a 364-day, $24 billion senior unsecured credit facility led by UBS, Credit Suisse and Citigroup to fund the acquisitions of Western Gas Resources and Kerr-McGee Corp., as well as pay off $2.2 billion in debt (7/14). Anadarko's divestiture of properties to EXCO are part of the company's plan for deleveraging after those summer acquisitions, according to a spokesman. He stated the company has other properties it is looking to divest, both off-shore and on-shore, but declined to comment on any potential transactions. A JPMorgan spokeswoman declined comment.