Energy XXI's $75 million perpetual convertible preferreds talked to yield 7.25%-7.75%, up 15%-20%

By Rebecca Melvin

New York, Dec. 2 - Price talk emerged Wednesday on the Energy XXI (Bermuda) Ltd.'s $75 million offering of convertible perpetual preferred stock that launched Tuesday. The deal is expected to come with a dividend of between 7.25% to 7.75% and an initial conversion premium of 15% to 20%, according to market sources.

The deal was expected to price Dec. 8, after the close of markets.

As previously reported, Energy XXI also plans to price 90 million shares of common stock, with a greenshoe of 13.5 million additional shares.

UBS Investment Bank and Credit Suisse Securities (USA) LLC are joint bookrunners for the offerings. Proceeds from both are to be used to fund previously announced acquisitions.

The convertibles are non-callable until Dec. 15, 2014 and then provisionally callable if the daily VWAP of the common stock is 150% of conversion price for at least 20 out of 30 consecutive trading days.

The dividend can be paid in cash or stock.

Energy XXI is a Hamilton, Bermuda-based oil and natural gas exploration and production company, with properties in the U.S. Gulf of Mexico.

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