Forestar plans $75 million loan, amendment to fund purchase of Credo

By Sara Rosenberg

New York, June 4 - Forestar Group Inc. has received a commitment for a $75 million loan to help fund its acquisition of Credo Petroleum Corp., company officials said in a conference call on Monday.

KeyBanc Capital Markets LLC is the lead bank on the deal.

In addition, the company plans to amend its existing credit facility to fund a significant portion of the purchase price, officials said.

Pro forma for the transaction, total debt to total capital ratio is expected at 38%.

Under the agreement, Credo is being purchased for $14.50 per share, representing an equity purchase price of about $146 million.

Closing is expected in the second half of this year, subject to customary conditions, including approval by Credo's stockholders.

Forestar Group is an Austin, Texas-based company that operates in three business segments: mineral resources, real estate and fiber resources. Credo is a Denver-based independent oil and gas exploration, development and production company.

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