Energy XXI sets talk for $700 million six-year notes at 10%-10¼%

By Paul A. Harris

St. Louis, May 22 - Energy XXI Gulf Coast, Inc. set price talk for its $700 million offering of six-year senior notes (Caa2/CCC) at 10% to 10¼% on Tuesday, according to an informed source.

The Regulation D and Regulation S private placement via Jefferies & Co. is expected to be completed on Thursday.

BNP Paribas and RBS Greenwich Capital are joint lead placement agents.

The notes will come with three years of call protection.

Proceeds, in addition to a draw upon the company's first-lien revolving credit facility, will be used to fund the previously announced acquisition of certain oil and natural gas properties in the Gulf of Mexico from Pogo Producing Co. and to repay its second-lien revolver in full.

The prospective issuer is a subsidiary of Houston-based Energy XXI (Bermuda) Ltd.

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