Goldman Sachs led the financing backing the acquisition of Belden & Blake Corp. by Capital C Energy Operations, an affiliate of Carlyle/Riverstone Global Energy and Power Fund II. "They had assisted with the bond offering, the entire structuring of the purchase of the company," explained Bob Peshek, senior v.p. and cfo of Belden, an oil and gas producer based in North Canton, Ohio.
The new credit comprises a $30 million revolver, $40 million letter of credit facility and $100 million term loan. It is priced at LIBOR plus 2 3/4%, but is tiered based on metrics that can bring the spread down, Peshek noted. The previous facility comprised a $100 million revolver and $25 million letter of credit facility and was priced at prime plus 2%. Abelco Finance and Foothill Capital were the previous leads and only lenders under the old facility. In addition to the bank debt the company called its remaining $225 million 9 7/8% notes due 2007 and issued new $192.5 million 8 3/4% notes due 2012.
The bank debt is a completely different structure now, said Peshek. "The term facility has a cash sweep mechanism in it as well where excess cash will be required to pay down the facility," he noted. In connection with the merger and sale of the company, Belden put into place a significant oil and gas hedge over the next 10 years. "[It gives us] great stability or certainty of our cash flow," Peshek said.