Frontier Oil obtains $175 million revolver

By Sara Rosenberg and Peter Heap

New York, May 29 - Frontier Oil Corp. obtained an amended and restated $175 million revolver due June 15, 2006, which will increase to $250 million once the merger with Holly Corp. is completed in August. Union Bank of California is administrative agent, documentation agent and lead manager while BNP Paribas was syndication agent on the facility.

Cash advances under the revolver are currently limited to $125 million, increasing to $200 million upon completion of the merger.

Interest is set by a grid at Libor plus 125 basis points to Libor plus 200 basis points, depending on the ratio of consolidated funded debt to consolidated EBITDA. The commitment fee is 30 to 37.5 basis points.

Security for the Houston energy company's revolver is accounts receivable and inventory.

Changes in the new agreement include the facilitation of intra-company funds flows and the provision for upstream and downstream guarantees.

"We are pleased to have closed the new revolving credit facility in such a timely manner. The addition of several new lenders for the planned expansion of the facility will augment the capacity of our existing bank group. Coupled with our healthy cash position, the new facility should provide the merged company with more than adequate liquidity going forward. The facilitation of the intra-company funds flows will add additional strength to our senior note issues," said Julie Edwards, chief financial officer, in a news release.

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