By Paul A. Harris
Portland, Ore., May 10 - Gastar Exploration USA, Inc. priced $200 million five-year senior secured notes (Caa2/B-/) at par to yield 8 5/8% on Friday, according to an informed source.
The coupon came at the tight end of coupon talk set in the 8¾% area. The reoffer price came on top of price talk.
Imperial Capital LLC was the bookrunner.
The timing of the deal was moved up; original timing had it pricing during the week ahead.
The notes feature a make-whole call at Treasuries plus 50 basis points until May 15, 2015, after which they become callable at 106.469. However a special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.
Proceeds will be used to finance the pending acquisition of mid-continent assets from Chesapeake Energy Corp., to repurchase 6,781,768 shares of the parent's common stock held by Chesapeake and to settle all current litigation with Chesapeake.
Proceeds will also be used to repay Gastar's revolver in full and for general corporate purposes.
The issuer is a subsidiary of Gastar Exploration Ltd., a Houston-based oil and gas exploration and production company.
| Issuer: | Gastar Exploration USA, Inc.
|
| Amount: | $200 million
|
| Maturity: | May 15, 2018
|
| Securities: | Senior secured notes
|
| Bookrunner: | Imperial Capital LLC
|
| Co-managers: | Tudor Pickering Holt & Co. Securities Inc., Iberia Capital Partners LLC
|
| Coupon: | 8 5/8%
|
| Price: | Par
|
| Yield: | 8 5/8%
|
| First call: | Make-whole call at Treasuries plus 50 bps until May 15, 2015, then callable at 106.469
|
| Special call: | Issuer may redeem 10% of the notes annually at 103 during the non-call period
|
| Equity clawback: | 35% at 108.625 until May 15, 2015
|
| Trade date: | May 10
|
| Settlement date: | May 15
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 8¾% area coupon at par
|
| Marketing: | Roadshow
|
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