Stone Energy Corp. (NYSE: SGY) has borrowed $385 million under Stone's bank credit facility, which represents all of the remaining undrawn amount that was available under the credit facility.
The company intends to use these funds for general corporate purposes. As of March 10, following the funding of this borrowing, the aggregate principal amount of borrowings under the credit facility was $477 million. This is in addition to $19 million of outstanding letters of credit. The bank borrowings will initially bear an interest rate of 5%.
On March 10, the banks provided notice to Stone under the credit facility of a request for a borrowing base redetermination. Stone expects that the borrowing base will be reduced to an amount below the current borrowings.
Stone has retained Lazard as its financial advisor and Latham & Watkins LLP as its legal advisor to assist the company in analyzing and considering financial, transactional, and strategic alternatives. Vinson & Elkins LLP will continue to provide ongoing corporate and finance representation.