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EP Energy downsizes bond offering to $2.75 billion, sets price talk
By Paul A. Harris
Portland, Ore., April 9 - EP Energy Corp. shifted $250 million to its bank loan from its two-part bond offering, trimming the overall size of the notes offering to $2.75 billion from $3 billion and upsizing the loan to $750 million from $500 million, a syndicate source said on Monday.
The secured tranche of the bond offering was upsized to $750 million from $500 million. The seven-year senior secured notes, which come with three years of call protection, are talked with a yield in the 7% area.
Moody's Investors Service assigns its Ba3 rating to the secured notes. Standard & Poor's assigns its BB- rating, a downgrade from the previous rating of BB.
The unsecured tranche was downsized to $2 billion from $2.5 billion. The eight-year senior unsecured notes, which come with four years of call protection, are talked with a yield in the 9½% area.
Moody's assigns its B2 rating to the unsecured notes, a one-notch downgrade from the previous B1 ratings. The S&P rating on the unsecured notes remains unchanged at B.
In addition to the resizing and price talk, the notes underwent covenant changes, the source said on Monday.
The books close at 11 a.m. ET on Tuesday, except for Chicago accounts. The deal is set to price on Tuesday.
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.
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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