Forest Alaska to launch $375 million of term debt on Nov. 9

By Sara Rosenberg

New York, Nov. 2 - Forest Alaska Operating LLC is scheduled to hold a bank meeting on the morning of Nov. 9 to launch its proposed $375 million of term loan debt, according to a market source.

Credit Suisse and JPMorgan are joint lead arrangers and joint bookrunners on the deal.

The debt is comprised of a $225 million first-lien term loan talked at Libor plus 375 basis points and a $150 million second-lien term loan talked at Libor plus 625 bps, the source said.

Proceeds will be used to fund a $350 million distribution to Forest Oil Corp. and provide initial working capital for operations.

Forest Oil plans to use the proceeds from the distribution to reduce its outstanding borrowings under its U.S. credit facility.

The term loans will be secured by Forest Alaska's assets and will be non-recourse to Forest Oil.

Forest Alaska is a new subsidiary of Forest Oil that was formed to hold oil and gas interests in the Cook Inlet region of Alaska.

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