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Clayton Williams Enters $350MM Credit Agreement With Ares Management

March 09, 2016, 08:00 AM
Filed Under: Energy

Clayton Williams Energy, Inc. announced it has entered into a credit agreement with certain funds managed by Ares Management, providing for the Lenders to make secured term loans to the company in the principal amount of $350 million. The company also has agreed to issue to the Lenders warrants to purchase 2.25 million shares of the company’s common stock at a price of $22.00 per share with rights to appoint two members to the company’s board of directors. Proceeds from this transaction will be used to fully repay the company’s outstanding indebtedness under its revolving credit facility and provide additional liquidity to fund the company’s operations and future development. Closing of this transaction is expected to occur on or before March 31, 2016.

Concurrently, the company announced an amendment to its bank revolving credit facility to reduce lender commitments to $100 million and ease financial covenants, among other changes. The amendment will be effective upon closing of the secured term loan transaction.

“Today’s announcement marks the successful conclusion of our company’s review of strategic alternatives,” said Mel Riggs, President of Clayton Williams Energy. “This transaction provides the liquidity we need to support our continuing operations and preserve our large core acreage positions in the Delaware Basin and Eagle Ford for future development and value creation. We are excited about building on this relationship with Ares Management.”

Goldman Sachs served as sole arranger and bookrunner, and Stephens Inc. advised the Lenders. Vinson & Elkins served as legal advisor to the Company, and Kirkland & Ellis LLP served as legal advisor to the Lenders.

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