EP Energy kicks off $3 billion offering of seven-, eight-year notes

By Paul A. Harris

Portland, Ore., April 2 - EP Energy Corp. kicked off a $3 billion two-part notes offering with a Monday lunch for investors, according to a syndicate source.

The deal, which is expected to price early in the April 9 week, features a $500 million tranche of seven-year senior secured notes that come with three years of call protection and a $2.5 billion tranche of eight-year senior unsecured notes, which come with four years of call protection.

Citigroup Global Markets Inc. is the left bookrunner for the leveraged buyout deal.

The joint bookrunners are J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BMO Capital Markets Corp., RBC Capital Markets, UBS Securities LLC and Nomura.

The respective tranches feature senior secured and senior unsecured incurrence-based covenants. There are no financial maintenance covenants.

Proceeds from the Rule 144A and Regulation S with registration rights notes will be used to fund acquisition of EP Energy by Apollo Global Management LLC, Riverstone Holdings LLC, Access Industries Inc. and other investors.

The issuing entities will be Everest Acquisition LLC and Everest Acquisition Finance Inc., special purpose vehicles of the Houston-based oil and natural gas exploration and production company.

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