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Sanchez Energy launches $400M senior secured first lien notes offering

Sanchez Energy Corp. launched a private offering of $400 million of senior notes due 2023, the net proceeds of which will be used to repay about $95 million in total outstanding borrowings, and accrued interest and fees, under its and its restricted subsidiaries' revolving credit facility and for general corporate purposes.

The notes will be senior secured first lien obligations of Sanchez Energy and will be guaranteed by each of the company's existing and future domestic restricted subsidiaries, with certain exceptions, according to a Feb. 6 news release.

Upon closing of the offering, Sanchez Energy plans to reduce its credit facility borrowing base from the current $350 million with a $300 million commitment amount to $25 million to use mainly for letters of credit and working capital. The company also plans to extend the maturity date of the credit facility to 2019 to 2023, remove all material financial maintenance covenants and provide for continued ability to hedge.

Sanchez Energy Corp. is an independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources in the onshore U.S. Gulf Coast.