Angelo Gordon leads $300m financing to Rex Energy

The 1L term loan comes as Angelo Gordon is raising second energy fund. 

Angelo, Gordon and Company has led a group of lenders on a $300 million facility to Rex Energy that will let it repay existing debt and fund oil and gas operations, the borrower said on Monday.

The first lien, delayed draw loan has an interest of LIBOR plus 8.75 percent on drawn amounts, according to a statement. The loan matures in April 2021.

The Pennsylvania-based oil and gas company has already borrowed $144 million under the loan to repay all outstanding obligations under a previous senior secured credit facility, to cover fees of the new term loan, and to add $19.3 million of cash to its balance sheet, the statement read.

Rex Energy had $117.7 million in borrowings outstanding under that credit facility as of 31 December, according the company’s annual report filed with the US Securities and Exchange Commission. A group of lenders led by Royal Bank of Canada provided the facility, which had a $190 million borrowing base with the possibility of bumping it up to $400 million, in March 2013.

In addition, the company also had $638.2 million of senior notes outstanding by the end of last year, the filing shows.

Tom Stabley, president and chief executive officer at Rex Energy, said in the statement that the financing will support a two-year development plan in the fossil fuel-laden Appalachian Basin in the eastern US, where most of its operations are located.

“The term loan provides Rex Energy with additional liquidity to continue to develop our high-return locations and the potential to access the M&A market,” Stabley added.

Todd Dittmann, head of Angelo Gordon’s energy practice, said in the statement that the combination of the financing and “Rex’s attractive portfolio of development opportunities” will likely “create meaningful value for all stakeholders”.

The lender was not immediately available to comment further.

Following the repayment of the credit facility, the new loan will allow Rex Energy to develop its core assets and current business. The financing also allows for an additional $100 million in secured first lien debt for oil or gas reserve development and acquisitions.

The term loan comes as Angelo Gordon has been actively fundraising in the energy sector. As of this March, the firm had collected $114.09 million for its sophomore energy investment vehicle, AG Energy Partners II, which has a $400 million fundraising target.

Angelo Gordon held a final close on the strategy’s first vehicle, AG Energy Credit Opportunities Fund, on $650 million last summer, Private Debt Investor exclusively reported, which had a $600 million to $700 million target.