Magnum Hunter Resources has completed the first phase of its financing backing its merger with Prize Energy and is now planning the retail round of syndication on the loan piece. The company has wrapped a successful bond offering and managing agent bank round. 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. The retail round will be done in April when second-tier lenders will be approached.
Chris Tong, senior v.p. and cfo, said the bond offering was upsized from $250 million to $300 million, though approximately $2 billion of orders came in. "I knew there would be strong demand, but this level was a surprise." The revolver, which was originally conceived as a $325 million facility, has been downsized temporarily to $275 million, though the lenders are attaining approval internally to upsize this to $300 million, Tong added. Pricing also was originally higher on the bonds, but after conferring with the banks Magnum settled on an annual rate of 9.6%, Tong explained. Meanwhile, pricing on the three-year borrowing-base facility is LIBOR plus 21/ 4%.