Canacol Energy announced it entered into discussions to upsize its existing senior secured term loan with a syndicate of banks led by Credit Suisse as lead arranger, sole bookrunner and administrative agent.

The existing $140 million term loan, entered into on April 3, 2013, is for a five-year term, with interest payable quarterly and principal repayable in 15 equal quarterly instalments starting in October 2014, following an initial 18-month grace period. The term loan carries interest at LIBOR plus 4.50% and is secured by all of the material assets of the corporation. Canacol is in advanced discussions to upsize this existing term loan by an additional $80 million on substantially the same commercial terms and with no changes to the timing of principal repayments.

Proceeds from the upsizing will be used for future capital expenditures in Colombia, costs of the transaction and for general corporate purposes.

Closing of the transaction is subject to credit and legal approvals from all the syndicate member banks, Canacol board of directors approval, and other customary closing conditions. The transaction is expected to close and be funded by late March or the beginning of April 2014.

Charle Gamba, president and CEO of Canacol, stated: “The anticipated upsizing of the syndicated term loan represents another milestone in the execution of Canacol’s business plan by securing non-dilutive cost-effective additional long-term funds for future capital expenditure activities and providing additional balance sheet liquidity. Should our exploration and appraisal drilling programs in 2014 continue to yield success, Canacol will be well capitalized to develop and bring them on stream quickly.”

Canacol is an exploration and production company with operations focused in Colombia and Ecuador.