Northern Oil and Gas, Inc. announced it has closed an agreement with TPG Sixth Street Partners for a new $400 million first lien credit facility. At the closing, an initial amount of $300 million was funded – an additional $100 million of delayed draw term loans are available to the Company, subject to the satisfaction of customary conditions. The new credit facility matures in five years and carries a floating interest rate of LIBOR, plus 7.75% (subject to a 1% LIBOR floor).
The company used approximately $161 million of the initial proceeds to repay and retire its bank credit facility led by Royal Bank of Canada, which was scheduled to mature in September 2018. Excess proceeds under the initial draw and additional availability under the new credit facility may be used for general corporate purposes, including, but not limited to, development of the Company's assets in the Williston Basin, future accretive acquisitions, and potential purchases of the company's outstanding unsecured senior notes and common shares.
"This new credit facility extends our debt maturities and significantly expands our available liquidity," stated Northern's Interim CEO and CFO Tom Stoelk. "With this enhanced financial flexibility we intend to continue to grow our oil-focused asset base in the Williston Basin while seeking additional accretive transactions to increase shareholder value." Richard Weber, Northern's Chairman of the Board, added, "We welcome TSSP as a partner and look forward to pursuing our strategic initiatives with their support. We also look forward to continuing discussions with our bondholders about potential transactions that would be beneficial for all of our stakeholders."
"Northern has a great management team and an attractive portfolio in the Williston Basin and we are pleased at the opportunity to provide this strategic capital," said Matt Dillard, Partner at TSSP. "Led by our dedicated energy team based in Houston and San Francisco, we are excited to partner with Northern, its leadership team and board of directors and look forward to working with them to create value for all stakeholders."
Evercore is serving as financial advisor to Northern Oil and Gas, Inc. and Jones Day is acting as legal counsel.