Gastar Exploration closed its capital and refinancing transactions with funds managed by affiliates of Ares Management. The transactions include $425 million in new financing in the form of a $250 million secured term loan, the issuance of $125 million secured convertible notes and a $50 million purchase of Gastar common stock.

Proceeds from the Ares Investment were used to fully repay Gastar’s existing $69.2 million revolving credit facility and to fund the redemption price of its $325 million 8.625% senior secured notes due May 2018, which have been called for redemption on March 24, 2017.

In connection with the closing of the Ares investment, Gastar and its priority collateral agent also entered into an inter-creditor arrangement with certain hedging counterparties to provide shared collateral coverage for the company’s existing and future commodities hedging positions.

Gastar Exploration is a pure play mid-continent independent energy company engaged in the exploration, development and production of oil, condensate, natural gas and natural gas liquids.