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Angelo, Gordon Leads $300MM First Lien Delayed Draw Term Loan for Rex Energy

May 01, 2017, 07:19 AM
Filed Under: Energy

Rex Energy Corporation announced that it has closed an agreement with a lending group led by Angelo, Gordon & Co. for a new $300 million first lien delayed draw term loan bearing interest of LIBOR + 8.75% on drawn amounts and maturing in April 2021.

Initial borrowings of approximately $144.0 million under the term loan were used to repay all outstanding loans and obligations under the company’s previous senior secured credit facility, pay fees and expenses associated with the term loan, and place approximately $19.3 million of cash on the balance sheet. The new facility also includes approximately $46.5 million for outstanding undrawn letters of credit. Following the repayment of the outstanding borrowings on the senior secured credit facility, the company will have approximately $110.0 million of additional capacity under the term loan, which will be available for the development of the company’s core assets and general corporate purposes. The term loan permits, under certain circumstances, the issuance of up to an additional $100 million in secured first lien debt for purposes of additional reserve development and acquisitions, positioning Rex Energy well for years to come.

The company plans to provide an update to its two-year financial and operational plan in the coming days.

“We are pleased to have completed this transaction and to have this lending group, led by Angelo Gordon, as a financing partner,” commented Tom Stabley, Rex Energy’s President and Chief Executive Officer. “This transaction will further ensure the execution of our two-year development plan in the Appalachian Basin. The term loan provides Rex Energy with additional liquidity to continue to develop our high-return locations and the potential to access the M&A market.”

Stabley added, “As we make this transition to a new facility, I want to recognize and thank our bank group under the senior secured credit facility for their support throughout the last several years.”

Todd Dittmann, head of Angelo Gordon’s energy practice, commented, “We are very excited about working with Rex Energy and its strong management team, to provide important access to capital that, in combination with Rex’s attractive portfolio of development opportunities, should create meaningful value for all stakeholders.”

Jones Day served as legal advisor to Rex Energy and Simpson Thacher & Bartlett LLP served as legal advisor to the lending group.

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