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Jericho Oil has raised a $30 million two-year senior secured revolving credit from sole arranger East West Bancorp. Signed on 29 July, the initial borrowing base has been set at $10 million. Proceeds are for general corporate purposes, working capital, capex and to support letters of credit.
The loan is priced at WSJ Prime plus 75bp. As the current WSJ Prime rate is 350bp, the loan will be fixed at 425bp for the first six months and then redetermined every six months.
In connection with and subject to the new facility, Jericho has also entered into commodity hedging contracts to strengthen and protect the company's cash flows, while maintaining optimal upside, covering 75% of forecast engineered oil and natural gas volumes for the term of the revolver.