Pacific Rubiales Readies Credit Facility

Pacific Rubiales has named BofA-Merrill Lynch as lead arranger for an up to $200m credit facility. The Canada-based oil producer operating in Colombia expects the syndicate to be made up of both Colombian and international lenders. The facility would replace existing smaller facilities, and the borrower does not expect to fully draw it down in 2010. Pricing will depend on ratings from S&P and Fitch, it says. The joint operator of the Quifa block in Colombia’s Llanos Basin raised $450m in November through a 8.75% 2016 bond, rated BB minus/B+, and $258m in a warrant exchange offer last month. Rubiales has about $615m in debt, according to Barclays Capital, which expects at least some of the facility to be drawn this year. “While we believe ratios could potentially deteriorate if the full capex program is implemented and production targets are not reached, we believe that the recent warrants transaction and cash on hand are likely to cover most of the needs,” the shop says, noting that the outlook remains positive.