By Devika Patel
Knoxville, Tenn., Jan. 7 - Crosstex Energy LP and Crosstex Energy, Inc. said they will raise $125 million from a private placement of 10% series A convertible preferred units with a 20% conversion premium.
The preferreds pay a quarterly distribution that will be the greater of $0.2125 per unit or the amount of the distribution per unit paid to common unitholders. The $0.2125 quarterly distribution is equivalent to 10% annually and is payable in cash or kind or a combination.
The preferred units are priced at $8.50 per unit and are convertible at any time into common units on a 1 for 1 basis. The price is a 20% premium to the trailing 30-day volume weighted average price of the common units.
The issuer can force conversion if conditions are met.
Crosstex intends to use the proceeds for debt reduction.
The investors were Blackstone/GSO Capital Solutions funds, managed by GSO Capital Partners LP. The investors will receive a seat on Crosstex Energy, LP's board.
Closing is expected by the end of January.
Crosstex Energy is a midstream natural gas company based in Dallas.
| Issuer: | Crosstex Energy LP and Crosstex Energy, Inc.
|
| Issue: | Series A convertible preferred units
|
| Amount: | $125 million
|
| Price: | $8.50
|
| Conversion ratio: | Into one common unit
|
| Conversion price: | $8.50
|
| Conversion premium: | 20%
|
| Distribution: | Greater of $0.2125 quarterly per unit (10% annually) or the amount of the distribution per unit paid to common unitholders
|
| Warrants: | No
|
| Pricing date: | Jan. 7
|
| Investor: | Blackstone/GSO Capital Solutions funds
|
| Stock symbol: | Nasdaq: XTXI (for Crosstex Energy, Inc.)
|
| Stock price: | $6.57 at close Jan. 6
|
| Market capitalization: | $332 million
|
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