W&T Offshore Inc. (NYSE: WTI) has completed the pricing and marketing of a $300 million five-year second-lien term loan. The term loan is expected to be made subject to a 1% discount to principal bearing interest at an annual rate of 9%.
It is expected that an entity controlled by Tracy W. Krohn, W&T Offshore's chairman and CEO, will participate in the term loan for a $5 million principal commitment on the same terms as other lenders.
Net borrowings under the term loan will be used to repay a portion of outstanding borrowings under the company's existing revolving credit facility. Upon the issuance of the term loan, the company's borrowing base under its revolving credit facility will be reduced from $600 million to $500 million.
The lender commitments and making of the term loan are subject to the negotiation, approval and execution of definitive loan documentation, which includes an intercreditor agreement to be approved by lenders under the company's revolving credit facility. While the term loan is expected to close early next week, there is no assurance that the term loan will be finalized and made.
W&T Offshore Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and onshore in the Permian Basin of West Texas.