W&T Offshore sets Wednesday retail launch for $1.3 billion facility

By Sara Rosenberg

New York, April 17 - W&T Offshore Inc. has firmed up timing on the retail launch of its proposed $1.3 billion senior secured credit facility by scheduling a bank meeting for Wednesday, according to a market source.

TD Securities and Lehman Brothers are the lead banks on the deal, with TD the left lead.

The facility consists of a $500 million revolver, a $500 million term loan A and a $300 million term loan B.

Price talk on the term loan B is expected to emerge the day of the launch.

A meeting for existing bank lenders only already took place on Feb. 16, during which the pro rata portion of the deal was presented to the group, resulting in that portion of the deal being fully syndicated at this point, the source said.

The revolver and term loan A are priced with an interest rate of Libor plus 275 basis points for the first six months after close, dropping down to Libor plus 250 bps thereafter, the source added. Once the term loan A has been repaid, pricing on the pro rata will be flipped into a pricing grid that can range from Libor plus 125 to 187.5 bps based on use.

Proceeds from the credit facility will be used to help fund the acquisition of substantially all of the Gulf of Mexico conventional shelf properties of Kerr-McGee Oil & Gas Corp. Base merger consideration for the transaction is $1.3 billion in cash.

The transaction is expected to close during the second quarter, subject to regulatory review and customary closing adjustments and conditions.

W&T Offshore is a Houston-based oil and natural gas company.

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