Credit Suisse First Boston and TD Securities are leading a $125 million second-lien term loan for Trident Exploration. The loan will be used for a dry coal project within Horseshoe Canyon, an area in Canada, said Randy Neely, cfo and treasurer.
The company decided to tap into the U.S. loan market with CSFB along with its historical lead of TD. "We ran a process last fall to pick a U.S. bank to assist with these types of things, U.S. offerings of debt or equity, so we basically combined the two--the strength of the Canadian bank with a high profile name in the U.S.," Neely said. The facility has a tenor of five-and-a-quarter years with pricing of LIBOR plus 7 1/2%. Call protection of 103, 102 and 101 is in place for the first three years. TD is also leading a C$10 million revolver.
Trident has C$75 million of debt first put on its books last July. Neely said it previously did not need to be rated, but anticipates it will be in the future. Based in Alberta, Canada, Trident is a private company involved in the exploration and production of coalbed methane (CBM), the natural gas found in coal. The company was founded in 2000 and went into commercial production in 2004. CMB accounts for about 10% of the natural gas supply in the U.S. Through joint ventures and acquisitions, the company has a land position of over 725,000 net acres. Ownership is shared by its founders, TD Capital Mezzanine Partners and other institutional owners.