Gastar Exploration selling perpetual preferreds to raise funds for capex program, acquisition

By Stephanie N. Rotondo

Phoenix, Oct. 28 - Gastar Exploration USA Ltd. plans to sell series B cumulative perpetual preferred stock, the company said in a prospectus filed with the Securities and Exchange Commission on Monday.

Barclays, Credit Suisse Securities (USA) Inc., MLV & Co. LLC and Sterne Agee & Leach Inc. are the joint bookrunning managers. Janney Montgomery Scott LLC is the lead manager.

Co-managers are Iberia Capital Partners LLC, Euro Pacific Capital Inc., Maxim Group LLC, National Securities Corp., Imperial Capital, Northland Capital Markets and Ladenburg Thalmann & Co. Inc.

Dividends are payable on a monthly basis. If the shares are not listed on any exchange for 180 consecutive days or if the company fails to make a dividend payment during four quarterly periods, the dividend rate will increase.

On or after 2018, the preferreds become redeemable at par plus accrued dividends. There is also a change-of-control feature.

Proceeds will be used to partly fund an ongoing capital expenditure program, including a portion of the cost associated with the pending West Edmond Hunton Lime Unit acquisition.

Gastar is an independent energy company based in Houston.

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