American Energy – Permian Basin LLC (AEPB), an affiliate of American Energy Partners LP (AELP), has priced its offering of $530 million of 13.00% senior secured first lien notes due 2020. The notes will be sold to investors at 100% of their principal amount. The offering of the notes is expected to close on Nov. 25.
The net proceeds from the offering of the notes will be used by AEPB to repay in full all loans outstanding under its existing revolving credit facility.
In conjunction with this offering, AEPB and its lending group have agreed to amend AEPB's existing revolving credit facility, which will reset the borrowing base to zero and remove all maintenance covenants currently governing the facility, so long as the borrowing base remains zero. As of Nov. 16, AEPB had approximately $28 million of cash and cash equivalents on hand and borrowings of $305 million outstanding under its revolving credit facility.
A portion of the net proceeds may be used to fund the remaining portion of a pending acquisition. Any additional proceeds are expected to be used to fund drilling and completion activities, related oil and gas infrastructure construction, and for ongoing expenses related to daily activities of AEPB's business.