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Trident Exploration launches $250 million of bank debt
By Sara Rosenberg
New York, April 6 - Trident Exploration Corp. held a lender meeting Thursday morning to launch its proposed $250 million of new bank debt, according to a market source.
Credit Suisse is bookrunner on the deal.
The new debt is comprised of a $100 million add-on to the company's existing $325 million second-lien term loan and a new $150 million unsecured term loan due November 2011, the source said.
The second-lien term loan add-on is priced at Libor plus 750 basis points, in-line with existing second-lien pricing. In fact, most significant terms of the second-lien will remain the same, such as security, maturity date and call protection, though the covenants will be adjusted to accommodate the new debt.
The new unsecured loan is talked at Libor plus 950 bps all pay-in-kind until Dec. 31, at which point it will increase by 50 bps PIK per quarter. The unsecured loan will convert to cash pay once net debt to EBITDA is less than 4 times.
The unsecured loan will be callable at par until June 30, 2007. In 2008, the loan will carry a call premium of 103, dropping down to 102 in 2009, 101 in 2010 and par thereafter.
Investors have already pre-circled half of the new unsecured loan, the source added.
Proceeds from the new debt will be used for drilling and gas processing plants.
Based on a first quarter 2006 private placement of equity, Trident has an equity value of $1.8 billion, backing the $575 million of total debt.
Trident Exploration is a Calgary-based company focused on the discovery and commercial development of natural gas in coal resources in the Western Canadian Sedimentary Basin.
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