Larchmont cuts loan to $250 million, ups spread to Libor plus 725 bps

By Sara Rosenberg

New York, July 29 - Larchmont Resources LLC downsized its six-year senior secured first-lien term loan to $250 million from $275 million and lifted pricing to Libor plus 725 basis points from talk of Libor plus 575 bps to 625 bps, according to a market source.

In addition, the loan is now non-callable for one year, then at 101 in year two, instead of having soft call protection of 102 in year one and 101 in year two, the source said.

The loan still has a 1% Libor floor and an original issue discount of 99.

Included in the loan is an incremental allowance of $25 million, down from the greater of $75 million and an amount such that pro forma leverage is 0.5 times below opening leverage, the source continued.

Also, the excess cash flow seep was changed to 100% from 100% at three times leverage, 50% at 2.5 times leverage and 0% at less than 2.5 times leverage.

Recommitments are due at noon ET on Wednesday, the source added.

Barclays and Jefferies Finance LLC are the bookrunners on the deal.

Proceeds will be used to refinance existing debt.

Larchmont Resources is a privately held entity owned by Aubrey K. McClendon (AKM) and EIG Global Energy Partners that holds oil and gas interests that AKM purchased through his participation in the Chesapeake Energy Corp. Founders Well Participation Program.

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