Published on 7/10/2012 in the Prospect News High Yield Daily.
New Issue: Eagle Rock sells $250 million tap of 8 3/8% seven-year notes at 98.501 to yield 8.666%
By Paul A. Harris
Portland, Ore., July 10 - In a restructured, quick-to-market Tuesday transaction, Eagle Rock Energy Partners, LP priced a $250 million add-on to its 8 3/8% senior notes due June 1, 2019 (B3/B/) at 98.501 to yield 8.666%, according to a syndicate source.
The reoffer price came on top of price talk.
Earlier in the day, prior to the restructuring, the Houston-based natural gas company launched into the market a proposed new issue of eight-year notes.
Wells Fargo Securities, LLC was the left bookrunner. Bank of America Merrill Lynch, Citigroup Global Markets Inc. and RBS Securities Inc. were the joint bookrunners.
Proceeds will be used to repay revolver debt.
The original $300 million issue priced at 99.279 to yield 8½% on May 24, 2011.
| Issuer: | Eagle Rock Energy Partners, LP
|
| Face amount: | $250 million
|
| Proceeds: | $246.25 million
|
| Maturity: | June 1, 2019
|
| Security description: | Add-on to 8 3/8% senior notes due June 1, 2019
|
| Left bookrunner: | Wells Fargo Securities, LLC
|
| Joint bookrunners: | Bank of America Merrill Lynch, Citigroup Global Markets Inc., RBS Securities Inc.
|
| Senior co-managers: | Banco Bilbao Vizcaya Argentaria, SA, Comerica Securities, Inc., ING Financial Markets LLC, RBC Capital Markets LLC, Scotia Capital (USA) Inc., UBS Securities LLC
|
| Co-managers: | Capital One Southcoast, Inc., U.S. Bancorp Investments, Inc.
|
| Coupon: | 8 3/8%
|
| Price: | 98.501
|
| Yield: | 8.666%
|
| Spread: | 771 bps
|
| Call features: | Make whole call at Treasuries plus 50 bps until June 1, 2015, then callable at 104.188, 102.094, par on and after June 1, 2017
|
| Equity clawback: | 35% at 108.375 until June 1, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | July 10
|
| Settlement date: | July 13 with accrued interest
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
| Distributed: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 98.501
|
| Marketing: | Quick to market
|
| Original issue: | $300 million priced at 99.279 to yield 8½% on May 24, 2011
|
| Total issue size: | $550 million
|
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