Saratoga Resources Inc. (NYSE: SARA) has issued $27.3 million of first lien notes in exchange for the retirement of $27.3 million of outstanding 12.5% senior secured notes and has issued an additional $27.3 million of first lien notes for cash.
The first lien notes bear interest at 10% per annum, mature Dec. 31, 2015 and are redeemable by the company at its option without prepayment premium.
Net proceeds will be used for general corporate purposes, including working capital and capital expenditures.
“We are pleased to have successfully refinanced a portion of our existing debt and to have added liquidity to support our development plan. The refinancing allows us, without payment of any prepayment premium otherwise applicable to our existing debt, to lower our interest rate on $27.3 million of outstanding debt from 12.5% to 10%. The additional $27.3 million financing will effectively take the place of a revolving credit facility which we had previously sought but with much more favorable covenants than we would have expected under a traditional revolver. The notes issued in both the new financing and the refinancing are redeemable by Saratoga at any time without a prepayment premium, enhancing our ability to refinance our debt in the future. With this transaction behind us, we are focused on the development of our prospect inventory and pursuit of potentially accretive acquisition opportunities,” Thomas Cooke, Saratoga’s chairman and CEO, said in the release.
Saratoga Resources Inc. is an independent energy company engaged in the acquisition, exploitation, production, and development of crude oil and natural gas properties in the U.S. The company is based in Houston.
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