ATP Oil & Gas launches $175 million term loan

By Sara Rosenberg

New York, March 9 - ATP Oil & Gas Corp. held a bank meeting for a proposed $175 million five-year term loan on Tuesday, according to a market source. Credit Suisse First Boston is the lead bank on the deal.

The term loan is priced with an interest rate of Libor plus 850 basis points, contains a 1.5% Libor floor and is being offered to investors at 99.

This deal will not be rated by the rating agencies, the source added.

Proceeds will be used to refinance the company's existing $125 million credit facility that consists of four tranches. Of the total amount, $110 million is a U.S. facility due in August 2007 and $15 million is a U.K. facility due on Jan. 31, 2005. Advances under the U.S. portion of the credit facility bear interest at the base rate plus a margin of 100 to 800 basis points, depending on the amount outstanding. As of the end of February, the average effective interest rate on the U.S. facility was about 9% per annum. Advances under the U.K. portion of the credit facility bear interest at the rate of 15% per annum, according to an 8-K filed with the Securities and Exchange Commission on Feb. 27.

ATP is a Houston natural gas and oil company.

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