Canacol Energy Ltd. Enters Into US $265 Million Senior Secured Term Loan To Replace Existing Credit Agreement


Jones Day, Gómez-Pinzón Zuleta Abogados, DLA Piper, Maples and Calder, Jones Walker, Estudio Jurídico Sánchez Calero, Valles & Asociados, Skadden, Arps, Slate, Meagher & Flom LLP, Brigard & Urrutia, Stikeman Elliot, Uría Menéndez, Alemán, Cordero, Galindo & Lee and Conyers Dill & Pearman have advised on the transaction

Canacol Energy Ltd. (“Canacol” or the “Corporation”) (TSX:CNE) (OTCQX:CNNEF) (BVC:CNEC) is pleased to announce that it has entered into a credit agreement for US$ 265 million senior secured term loan with a syndicate of banks led by Credit Suisse as Sole Lead Arranger and Sole Bookrunner, and including Mandated Lead Arrangers Export Development Canada, Davivienda, Citibank and Managers Metrobank, Banco Internacional de Costa Rica (BICSA), Banco Latinoamericano de Comercio Exterior (Bladex), BHD International Bank and Bancaribe. Funding occurred earlier today.

The new credit agreement will replace the Corporation’s existing two facilities with BNP Paribas (“BNP Facility”) and Apollo Investment Corporation Senior Notes (“Apollo Notes”) and will offer the following benefits: 1) defers amortization payments until March, 2019, allowing the Corporation to dedicate capital to high netback production related projects instead of debt service; 2) reduces the total annual interest costs as compared to the combined BNP Facility and Apollo Notes by approximately 1.1% and, 3) harmonizes compliance and administrative deliverables under one facility.

Although the Corporation’s currently contemplated 2017 capital budget lies within its 2017 cash flow and existing cash, the new credit agreement will also allow an additional US$ 40 million of Greenshoe funds available within 12 months post-funding, allowing Canacol increased financial flexibility as it pursues its stated gas production goal of 230 mmscf/d by late 2018. This option is at the discretion of the Corporation and on the same terms and conditions of the initial funding.

The term loan will mature on March 20, 2022, with interest payable quarterly and principal repayable in 13 equal quarterly instalments starting March 20, 2019, following more than two years of initial grace period. The term loan will carry interest at LIBOR plus 5.5% and will be secured by all of the material assets of the Corporation.

Proceeds from the term loan will be used for repayment of principal in the amount of US$ 255 million. This includes US$ 180 million of the BNP Facility and US$ 75 million of Apollo Notes, plus accrued interest and costs of the transaction.

In US, Jones Day has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with James J. Salerno (Picture), Beth Vogel, Candace Ridgway, Michael Gurdak, Fahad Habib, Elba Bermudez, Joanne Wallace, Sean Jackowitz, Alina Fortson, Nicolas Rukavina Mikusic and Lina Vélez.

Gómez-Pinzón Zuleta Abogados has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Daniel Londoño Pinzón, Germán Villamil Pardo, Fabio Ardila Garzón and Andrés Felipe Consuegra Hoyos.

DLA Piper LLP has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Trevor Wong-Chor, Douglas Shields, Andrew Lloyd and Jonathan Brown.

Maples and Calder has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Richard May and Guy Williamson.

Jones Walker has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Robert Scheffy.

In Spain, Estudio Jurídico Sánchez Calero has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Adolfo Domínguez.

In Panama, Valles & Asociados has advised Canacol Energy Ltd. and CNE Oil & Gas S.A.S. with Abraham Isaí Valles.

In US, Skadden, Arps, Slate, Meagher & Flom has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Alejandro González Lazzeri, Ana Sofía Kowalenko, Nicolás Pérez Sierra and Alejandro Ascencio.

Brigard & Urrutia has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Susana Hidvegi, César Rodríguez, Manuel Fernando Quinche, Juan Eduardo Gómez, Laura Clara Loaiza and María José Rocha Solano.

In Canada, Stikeman Elliot has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Michael Dyck. Asociada Amy Nugent.

In Spain Uría Menéndez has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Jaime Pereda Espeso and Clara Muñoz Palma.

In Panama, Alemán, Cordero, Galindo & Lee has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Eloy Alfaro.

In BVI, Conyers Dill & Pearman has advised Credit Suisse, Export Development Canada, Davivienda, Citibank, Metrobank, Banco Internacional de Costa Rica, Banco Latinoamericano de Comercio Exterior, BHD International Bank and Bancaribe with Audrey M. Robertson.

Involved fees earner: Abraham Isai Valles – Valles & Asociados; Adolfo Domínguez Ruiz de Huidobro – Estudio Jurídico Sánchez Calero; Eloy Alfaro – Alemán, Cordero, Galindo & Lee; Robert Scheffy Jr. – Jones Walker LLP; Susana Hidvegi Arango – Brigard & Urrutia; César Rodríguez – Brigard & Urrutia; Manuel Fernando Quinche – Brigard & Urrutia; Juan Eduardo Gómez – Brigard & Urrutia; Laura Clara Loaiza – Brigard & Urrutia; Daniel Londoño – Gómez-Pinzón Zuleta Abogados; Germán Villamil-Pardo – Gómez-Pinzón Zuleta Abogados; Fabio Ardila Garzón – Gómez-Pinzón Zuleta Abogados; Andrés Felipe Bolaños Rincón – Gómez-Pinzón Zuleta Abogados; Richard May – Maples and Calder LLP; Guy Williamson – Maples and Calder LLP; Audrey Robertson – Conyers Dill & Pearman; Michael Dyck – Stikeman Elliott; Amy Nugent – Stikeman Elliott; Jaime Pereda Espeso – Uría Menéndez; Clara Muñoz Palma – Uría Menéndez; Alejandro Gonzalez Lazzeri – Skadden Arps Slate Meager & Flom; Ana Kowalenko – Skadden Arps Slate Meager & Flom; Nicolas Perez Sierra – Skadden Arps Slate Meager & Flom; James Salerno – Jones Day; Beth Vogel – Jones Day; Elba Bermudez – Jones Day; Nicolas Rukavina Mikusic – Jones Day; Candace Ridgway – Jones Day; Sean Jackowitz – Jones Day; Michael Gurdak – Jones Day; Fahad Habib – Jones Day; Joanne Wallace – Jones Day; Alina Fortson – Jones Day; Douglas Shields – DLA Piper; Jonathan Brown – DLA Piper; Trevor Wong-Chor – DLA Piper; Andrew Lloyd – DLA Piper;

Law Firms: Valles & Asociados; Estudio Jurídico Sánchez Calero; Alemán, Cordero, Galindo & Lee; Jones Walker LLP; Brigard & Urrutia; Gómez-Pinzón Zuleta Abogados; Maples and Calder LLP; Conyers Dill & Pearman; Stikeman Elliott; Uría Menéndez; Skadden Arps Slate Meager & Flom; Jones Day; DLA Piper;

Clients: Citibank; Credit Suisse; Canacol Energy Ltd.; Export Development Canada; Banco Latinoamericano de Comercio Exterior S.A.; Bancaribe Curacao Bank, NV; MetroBank, S.A.; Banco Davivienda S.A.; Banco Internacional de Costa Rica SA; BHD International Bank SA;

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Author: Ambrogio Visconti