Rex Energy closed an agreement with a lending group led by Angelo Gordon for a new $300 million first lien delayed draw term loan bearing interest of LIBOR + 8.75% on drawn amounts and maturing in April 2021.

Initial borrowings of approximately $144 million under the term loan were used to repay all outstanding loans and obligations under the company’s previous senior secured credit facility, pay fees and expenses associated with the term loan and place approximately $19.3 million of cash on the balance sheet.

The new facility also includes approximately $46.5 million for outstanding undrawn letters of credit. Following the repayment of the outstanding borrowings on the senior secured credit facility, the company will have approximately $110 million of additional capacity under the term loan, which will be available for the development of the company’s core assets and general corporate purposes.

The term loan permits, under certain circumstances, the issuance of up to an additional $100 million in secured first lien debt for purposes of additional reserve development and acquisitions, positioning Rex Energy well for years to come.

“We are pleased to have completed this transaction and to have this lending group, led by Angelo Gordon, as a financing partner,” said Tom Stabley, Rex Energy’s president and CEO. “This transaction will further ensure the execution of our two-year development plan in the Appalachian Basin. The term loan provides Rex Energy with additional liquidity to continue to develop our high-return locations and the potential to access the M&A market.”

Jones Day served as legal advisor to Rex Energy, and Simpson Thacher & Bartlett served as legal advisor to the lending group.