Energy XXI greenshoe exercised, lifts convertibles to $287.5 million

By Melissa Kory

Cleveland, Nov. 5 - Energy XXI Ltd.'s underwriters exercised in full their over-allotment options for the company's sale of 5.625% convertible perpetual preferred stock, increasing the size to $287.5 million.

The original $250 million preferred offering was priced after the close on Oct. 28 to yield 5.625% with an initial conversion premium of 22.5%.

UBS Securities LLC, BNP Paribas Securities Corp. and RBS Securities Inc. were joint bookrunners.

In total, the company sold 1.15 million preferred shares at $250 each.

The greenshoe was also exercised on Energy XXI's concurrent stock sale, raising it to 13.8 million shares of common stock at $20.75 per share.

Gross proceeds from the two transactions were $573.9 million gross proceeds. The company initially targeted gross proceeds of $400 million but upsized the offering based on investor demand.

UBS Securities LLC and Credit Suisse Securities (USA) LLC were joint bookrunners for the common stock offering.

The company intends to use $132.2 million of the $555.9 million net proceeds from these offerings to redeem $119.7 million of its 16% second-lien junior secured notes due 2014 and $91.5 million of proceeds to repay amounts outstanding under its subsidiary's revolving credit facility. The remaining proceeds will be used for general corporate purposes, which may include purchases of the 16% second-lien notes, repayment of other outstanding debt or accelerating development of existing reserves or acquisitions.

Energy XXI is a Hamilton, Bermuda-based independent oil and natural gas exploration and production company.

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