Petrohawk sets upfront fees; Idearc inches up; TXU levels tighten; LCDX softens

By Sara Rosenberg

New York, Aug. 18 - Petrohawk Energy Corp. came out with upfront fees on its revolving credit facility as the deal was launched to lenders during Monday's market hours.

Over in the secondary market, Idearc Inc.'s term loan was a touch better in sympathy with the company's bonds, Texas Competitive Electric Holdings' (TXU) term loan levels tightened as people had time to evaluate earnings, and LCDX 10 was slightly lower with equities.

Petrohawk Energy held a bank meeting in Houston on Monday afternoon to kick off syndication on its proposed $1.5 billion five-year revolving credit facility, and in connection with the launch, upfront fees were announced, according to a market source.

For new money, investors are being offered 30 basis points for orders of $50 million, 40 bps for orders of $75 million and 50 bps for orders of $125 million, the source said.

Meanwhile, existing lenders will be paid a 25 bps upfront fee for rolling over their commitments into the new deal, the source continued.

The source went on to describe the actual bank meeting as well attended with existing and new lenders looking at the deal.

As was previously reported, pricing on the revolver can range from Libor plus 125 bps to 200 bps based on usage, and the commitment fee on the revolver can range from 30 bps to 37.5 bps.

Initially, pricing will be at the low end of the grid - Libor plus 125 bps - because the company's recent equity offering has repaid outstanding debt.

However, because of the company's active drilling program, there is expected to be future usage under the borrowing base, the source added.

Last week, Petrohawk priced a public offering of 25 million shares of common stock at a price of $26.53 per share, and underwriters are being granted a 30-day option to purchase up to an additional 3.75 million shares of common stock.

Net proceeds from the offering are being used to repay the outstanding borrowings under the company's existing revolver, fund pending and additional leasehold acquisitions, fund a portion of its increased capital budget for this year and for general corporate purposes.

BNP Paribas is the lead bank on the new revolver that will be used to refinance existing debt.

The initial borrowing base on the revolver is set at $1.1 billion.

Petrohawk is a Houston-based acquirer, developer, producer and explorer of oil and natural gas properties.

Idearc rises

Switching to trading news, Idearc's term loan was slightly higher in a very quiet summer session, according to a trader.

The term loan was quoted at 69¾ bid, 70¾ offered, up about an eighth of a point on the day, the trader said.

The trader explained that the bank debt was probably better because it was following the company's high-yield bonds, which were unchanged to slightly stronger on Monday.

Idearc is a Dallas-based provider of yellow and white page directories and related advertising products.

TXU tightens

Texas Competitive's term loan debt saw bids rise and offers come in now that investors have had time to digest recently announced second-quarter and year-to-date numbers that were put out by parent company, Energy Future Holdings Corp., according to a trader.

The Dallas-based energy company's term loan B-2 was quoted at 93½ bid, 94 1/8 offered, compared to 93 1/8 bid, 94 offered on Friday, and the term loan B-3 was quoted at 93¼ bid, 94 offered, compared to 93 bid, 93 7/8 offered on Friday, the trader said.

On Friday, Energy Future Holdings said that it had a net loss of $3.331 billion in the second quarter, compared to net income of $121 million in the second quarter 2007.

The net loss included net after-tax expenses of $3.08 billion that are not included in adjusted operating earnings, primarily reflecting $3.071 billion in unrealized mark-to-market net losses, virtually all related to forward natural gas positions in its long-term hedging program.

Adjusted operating earnings totaled a net loss of $251 million for the second quarter, compared to net income of $388 million for the same period last year.

For the six months ended June 30, Energy Future Holdings' consolidated net income was a net loss of $4.6 billion, compared to a net loss of $377 million for year-to-date 2007.

The net loss included net after-tax expenses of $4.109 billion that are not included in adjusted operating earnings, primarily reflecting $4.098 billion in unrealized mark-to-market net losses primarily related to long-term hedging.

Adjusted operating earnings in the six month period totaled a net loss of $491 million, compared to net earnings of $868 million last year.

LCDX dips with stock

LCDX 10 was a little bit weaker in light volume on Monday as equities sold off, while the loan cash market in general was basically flat, according to a trader.

The index was quoted at 96.70 bid, 96.80 offered, down from 96.80 bid, 96.90 offered, the trader said.

As for stocks, Nasdaq was down 35.54 points, or 1.45%, Dow Jones Industrial Average was down 180.51 points, or 1.55%, S&P 500 was down 19.60 points, or 1.51%, and NYSE was down 101.81 points, or 1.21%.

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