CDX Gas $650 million credit facility to launch Tuesday

By Sara Rosenberg

New York, March 10 - CDX Gas LLC is scheduled to hold a bank meeting on Tuesday morning in New York City to launch its proposed $650 million credit facility, according to a market source.

Credit Suisse is the bookrunner on the deal.

The facility consists of a $250 million conforming borrowing base five-year revolver priced at Libor plus 150 to 225 basis points based on use, and a $400 million seven-year second-lien term loan talked at Libor plus 575 bps, the source said.

The second-lien term loan contains soft call protection of 102 in year one and 101 in year two.

Proceeds will be used to help fund the $808 million buyout of CDX Gas by TCW.

In addition to the bank debt, the company will also get a $50 million eight-year pay-in-kind preferred at Libor plus 750 bps, with soft call protection of 103 in year one, 102 in year two and 101 in year three, the source added.

Furthermore, the sponsors are contributing $500 million of equity for the transaction and to provide over $100 million of cash for its drilling program.

As for credit statistics, net debt to EBITDA is less than 4 times and 2006 estimated EBITDA is $86 million.

CDX is a Dallas-based independent energy company focused on the development and production of natural gas from onshore North American unconventional natural gas resources located in coal, shale and tight gas sandstone formations.

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