By Rebecca Melvin
New York, July 17 – WPX Energy Inc. priced an upsized $350 million of 6.25% mandatory convertible preferred shares, at $50 par with an initial conversion premium of 20%, according to a regulatory filing.
There is $52.5 million over-allotment option for the mandatories, which was upsized from $45 million.
Pricing of the registered deal came at the midpoint of talk for a 6% to 6.5% dividend and a 17.5% to 22.5% premium.
WPX also sold a concurrent upsized offering of 30 million shares of common stock at $10.10 each. Initially, the stock deal was talked at 27 million shares, and the mandatory deal was initially expected to be $300 million in size.
The company is also expected to price $1.2 billion of straight notes early Friday. All of the deals are being made by means of separate prospectus supplements under WPX’s effective shelf registration statement.
Joint bookrunning managers of the mandatory offering were Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities, LLC and BNP Paribas Securities Corp.
BBVA Securities Inc. was a joint lead manager.
Proceeds from the offerings, cash on hand and borrowings under its revolving credit facility will be used to finance the company’s acquisition of RKI Exploration and Production LLC.
The mandatories are redeemable if the acquisition is not completed by Nov. 30.
Tulsa, Okla.-based WPX is a natural gas and oil exploration and production company.
| Issuer: | WPX Energy Inc.
|
| Securities: | Mandatory convertible preferred stock
|
| Amount: | $350 million, upsized from $300 million
|
| Greenshoe: | $52.5 million, upsized from $45 million
|
| Maturity: | July 31, 2018
|
| Concurrent offering: | 30 million shares of common stock, at $10.10 each
|
| Bookrunners: | Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities, LLC, BNP Paribas Securities Corp.
|
| Joint lead manager: | BBVA Securities Inc.
|
| Co-managers: | Credit Agricole Securities (USA) Inc., MUFG, RBC Capital Markets LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments Inc., TD Securities (USA) LLC, BB&T Capital Markets, BOSC Inc., Credit Suisse Securities (USA) Inc.
|
| Dividend: | 6.25%
|
| Price: | Par of $50.00
|
| Yield: | 6.25%
|
| Threshold appreciation price: | $12.12
|
| Maximum conversion rate: | 4.9504 shares
|
| Minimum conversion rate: | 4.1254 shares
|
| Price talk: | 6%-6.5%, up 17.5%-22.5%
|
| Pricing date: | July 16
|
| Settlement date: | July 22
|
| Distribution: | Registered, off the shelf
|
| Stock symbol: | NYSE: WPX
|
| Stock price: | $10.34 at close July 16
|
| Stock reference price: | $10.10
|
| Market capitalization: | $2.02 billion
|
| Expected mandatory listing: | NYSE: WPXP
|
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