MEG Energy to launch $1.5 billion credit facility on Tuesday

By Sara Rosenberg

New York, March 7 - MEG Energy Corp. is scheduled to hold a conference call at 10:30 a.m. ET on Tuesday to launch a proposed $1.5 billion credit facility, according to a market source.

Barclays, Credit Suisse, BMO Capital Markets and Morgan Stanley are the joint bookrunners on the deal, with Barclays the left lead.

The facility consists of a $500 million revolver and a $1 billion term loan B, the source said, adding that price talk is not yet available.

Proceeds from the credit facility, along with $500 million of senior notes, will be used to refinance the company's existing revolver, term loan B and term loan D and for general corporate purposes.

Currently, the company's revolver due Jan. 31, 2013 is sized at $200 million, its term loan B due April 3, 2013 is sized at $41.5 million and its term loan D due April 3, 2016 is sized at $957.9 million, according to recent filings with SEDAR.

Pricing on the existing revolver is Libor plus 400 basis points with a 75 bps unused fee, pricing on the term loan B is Libor plus 200 bps and pricing on the term loan D is Libor plus 400 bps with a 2% Libor floor.

Closing on the credit facility and the notes is expected to occur at the same time.

MEG Energy is a Calgary, Alta.-based oil sands development company.

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