Enterra Energy Trust announced today it and its underwriters are reconsidering the recently announced bought deal financing in light of the proposed changes to the taxation of income trusts and the ensuing impact on the capital markets.
On October 24, 2006, the Trust concurrently announced a $155-million bought deal of trust units and convertible unsecured subordinated debentures, and related $200-million in senior secured credit facilities. The bought deal financing was originally scheduled to close on November 9, 2006 and has been postponed pending the reconsideration.
In order to increase the financing options available to the Trust, Enterra also announces that it has agreed to terms with one of its existing lenders, Brookfield Bridge Lending Fund Inc., for a $350-million Senior Secured Bridge Facility. If used, drawdown under the facility is expected to occur on or about November 30, 2006 and is subject to a number of conditions including formal documentation and approvals by both parties. The loan would mature on May 31, 2007.
The net proceeds from the bought deal financing together with drawings under the related senior secured credit facilities, or possible drawings under the Senior Secured Bridge Facility, will be used to repay in full all indebtedness under the current outstanding bridge facilities.