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Sitio Royalties enters into $250 million bridge loan facility
Chicago, June 27 – Sitio Royalties Corp. reported that wholly owned subsidiary Sitio Royalties Operating Partnership, LP signed for a $250 million 364-day bridge term loan on Friday, according to an 8-K filed with the Securities and Exchange Commission.
The facility matures on June 23, 2023.
Interest based on SOFR will have quarterly step-ups. The initial margin is 600 basis points. It moves up to 650 bps on Sept. 22, 700 bps starting on Dec. 21, 2022 and then starting March 21, 2023 will be 750 bps.
A duration fee will be paid to the lender ranging from 50 bps to 100 bps.
Bank of America, NA is the administrative agent.
BofA Securities, Inc. is a joint lead arranger and the only bookrunner.
Barclays and KeyBank NA are joint lead arrangers.
Proceeds will be used to finance a portion of the Foundation Minerals acquisition. Subsidiary KMF Land, LLC purchased approximately 19,700 net royalty acres in the Permian Basin owned by Foundation for approximately $323 million. The acquisition effective date was April 1.
Notably, KMF Land is set to purchase another 12,200 net royalty acres in the Permian Basin. The $224 million acquisition from Momentum Minerals is expected to close in the third quarter and will be funded with debt proceeds.
On June 7, the parent paved the way for the bridge loan by amending its credit agreement with Bank of America, NA as administrative agent.
The amendment waives the borrowing base reduction that would otherwise apply to the incurrence of permitted additional debt.
The maturity date of the credit agreement now includes a springing maturity date for 91 days before the maturity date of the bridge loan if any portion of the bridge loan is outstanding on that date.
Sitio is a shareholder returns-driven company focused on large-scale consolidation of high-quality oil & gas mineral and royalty interests across premium basins. The borrower is based in Denver.
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