Legacy Oil + Gas Inc. Announces Strategic Partnership with CPPIB Credit Investments Inc. and Maintenance of Syndicated Bank Facilities /NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION OVER UNITED STATES WIRE SERVICES/ CALGARY, Nov. 1, 2012 /CNW/ - Legacy Oil + Gas Inc. ("Legacy" or the "Company") (TSX: LEG) is pleased to announce that it has entered into a subscription agreement with CPPIB Credit Investments Inc., ("CII"), a wholly-owned subsidiary of the CPP Investment Board ("CPPIB") for an investment by CII in Legacy, subject to final documentation. The initial investment will be in the form of US$200 million of unsecured, five year term notes with a 7.5% coupon (the "Notes"), to be issued pursuant to a trust indenture with a Canadian trust company (the "Indenture"), with an additional US$100 million of notes available at a future date, subject to the approval of both CII and Legacy on terms to be confirmed at the time of issuance. In addition, the Company is pleased to announce that its syndicate of lenders, led by BMO Capital Markets as Administration Agent, and The Bank of Nova Scotia and National Bank of Canada as Co-Syndication Agents and including BMO Capital Markets, The Bank of Nova Scotia, Alberta Treasury Branches, National Bank of Canada, Canadian Imperial Bank of Commerce, The Toronto-Dominion Bank and JP Morgan Chase Bank NA as lenders, has maintained the borrowing base at C$525 million after taking into account the issue of the Notes, subject to final documentation. The next annual borrowing base review is scheduled for on or before April 30, 2013. The key terms of the Notes are as follows: Principal: US$200 million initial investment, with a further US$100 million issuable with the approval of both parties Coupon: 7.5% for the initial US$200 million of Notes Pricing: Issued at par Ranking: Senior unsecured indebtedness Term: Five years Prepayment: Make whole and change of control provisions as described in the Indenture Covenants: Certain customary covenants with respect to additional debt incurrence, dividends, asset sales and other customary covenants to be set forth in the Indenture Legacy will use the net proceeds of the Notes to reduce borrowings under its syndicated credit facility. The Company has no intent to increase overall leverage, but has pursued the investment by CII for the purposes of increasing liquidity, improving financial flexibility and diversifying its sources of capital. The introduction of the Notes improves the long term sustainability of Legacy's business model. Although no specific agreements have been reached, CPPIB and the Company may consider equity investments at some time in the future, subject to terms negotiated at that time. Closing of the investment is anticipated to occur on or about November 15, 2012. Closing is subject to the satisfaction of all of the conditions to closing set out in the subscription agreement and to the finalization and execution of all required documentation. The Indenture will be available for review following closing under the Corporation's profile on SEDAR at www.sedar.com. With respect to the Notes transaction, GMP Securities acted as Sole Lead Book-Running Manager;BMO Capital Markets and Scotiabank acted as Co-Managers. About CPPIB Credit Investments Inc.: CPPIB Credit Investments Inc. is a multi-faceted global credit investment program wholly owned by the CPP Investment Board. Since its inception, the group has invested approximately C$9.0 billion of capital. With investments in the Americas, Europe and Asia, the team is focused on providing debt financing across the entire capital structure including term loans, high-yield bonds, mezzanine lending and other solutions for corporations. The CPPIB is a professional investment management organization that invests the funds not needed by the Canada Pension Plan ("CPP") to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPPIB invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, the CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At June 30, 2012, the CPP Fund totaled $165.8 billion. For more information about the CPPIB, please visit www.cppib.ca Legacy is a uniquely positioned, technically driven intermediate oil and natural gas company with a proven management team committed to aggressive, cost-effective growth of light oil reserves and production in large hydrocarbon in-place assets and resource plays. Legacy's common shares trade on the TSX under the symbol LEG. This news release and the information contained herein does not constitute an offer of the Notes for sale in the United States and the Notes may not be offered or sold in the United States, absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the "Securities Act") and applicable state securities laws. The Notes have not been and will not be registered under the Securities Act. This news release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any offer or sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated closing of the investment by CII. The forward-looking statements contained herein are based on certain key expectations and assumptions made by Legacy, including assumptions with respect to the satisfaction of all of the conditions to closing set out in the subscription agreement and the due finalization and execution of all required documentation. Although Legacy believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Legacy can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The investment by CII may not close at the anticipated time or at all due to a number of factors and risks. These include, but are not limited to, the failure to satisfy all of the conditions to closing set out in the subscription agreement or the failure of the parties to agree to acceptable final documentation. The forward-looking statements contained in this press release are made as of the date hereof and Legacy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Trent J. Yanko, P.Eng. President + CEO Legacy Oil + Gas Inc. 4400, 525 - 8th Avenue S.W. Calgary, AB T2P 1G1 Telephone: 403.441.2300 Fax: 403.441.2017 Matt Janisch, P.Eng. Vice-President, Finance + CFO Legacy Oil + Gas Inc. 4400, 525 - 8th Avenue S.W. Calgary, AB T2P 1G1 Telephone: 403.441.2300 Fax: 403.441.2017 SOURCE: Legacy Oil + Gas Inc. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/November2012/01/c4304.html CO: Legacy Oil + Gas Inc. ST: Alberta NI: OIL FIN ORDER -0- Nov/01/2012 21:34 GMT
Legacy Oil + Gas Inc. Announces Strategic Partnership with CPPIB Credit Investments Inc. and Maintenance of Syndicated Bank
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