MEG Energy readies launch of $1.24 billion term loan B for Tuesday

By Sara Rosenberg

New York, Jan. 12 – MEG Energy Corp. is scheduled to hold a bank meeting at 10:30 a.m. ET on Tuesday to launch a $1,235,000,000 senior secured term loan B, according to a market source.

Barclays, BMO Capital Markets and RBC Capital Markets are the bookrunners on the deal.

Proceeds will be used to refinance an existing term loan B due 2020.

The company said in a news release that it also expects to extend the maturity on its covenant-light revolving credit facility by two years to Nov. 5, 2021 and reduce the commitment amount to $1.4 billion.

And, the company expects to amend its credit agreement to allow for the issuance of second-lien debt, to permit the sale of its interest in the Access Pipeline without lender consent, provided 70% of the net proceeds are used to repay first-lien term debt, and to allow for the sale of an additional $550 million of certain encumbered assets, in addition to the $200 million already permitted, without lender consent, provided that 70% of the net proceeds from any such sale are used to repay first-lien term debt.

In addition, the company is issuing $750 million of eight-year senior secured second-lien notes to refinance existing notes due 2021.

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

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