PetroLatina refinances loans with lower-priced $100 million revolver

By Susanna Moon

Chicago, Dec. 12 - PetroLatina Energy plc said it entered into a senior secured credit agreement with BNP Paribas for a $100 million four-year revolving senior secured loan facility to replace its higher-priced facility with Macquarie Bank Ltd.

The initial borrowing base has been set at $36 million, which was drawn down at closing this past Friday. Of this amount, $29.43 million was used to repay the company's existing senior secured facility and close out the related oil price hedging contracts with Macquarie.

The drawdown availability will be determined relative to a borrowing base calculated by reference to the company's proved reserves, according to the company press release.

Pricing was reduced to Libor plus 450 basis points, down from Libor plus 750 bps under the agreement with Macquarie. The current Libor rate is about 0.54%.

Proceeds also will be used to help finance the accelerated development and enhancement of the company's oil and gas assets in Colombia.

The loan agreement matures on Dec. 9, 2015.

BNP was the lead arranger and bookrunner as well as the administration agent and global coordinator under the facility.

"This new senior facility, comprising a reserve based lending loan, provides us with increased and more cost effective financial and operational flexibility to enable PetroLatina to take advantage of the current rapid growth in the Latin American energy market at a time of considerable global macroeconomic uncertainty and volatility," Luc Gerard, executive chairman of PetroLatina, said in the release.

"The company endeavors to maintain an appropriate mix of debt and equity to finance its growth aspirations and the senior facility with BNP is consistent with, and an important part of, this strategy, serving to enhance our liquidity as we continue to execute our long-term exploration and development program for our extensive asset base in Colombia."

London-based PetroLatina explores and extracts Latin American oil and gas reserves.

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