By Paul A. Harris
Portland, Ore., April 10 - EP Energy Corp. priced a downsized $2.75 billion of high-yield notes in two tranches on Tuesday, according to a syndicate source.
The deal included an upsized $750 million issue of seven-year senior secured notes (Ba3/BB-, previous ratings Ba3/BB), which priced at par to yield 6 7/8%. The secured tranche was upsized from $500 million and priced at the tight end of price talk, which was set in the 7% area.
EP Energy also priced a downsized $2 billion issue of eight-year senior unsecured notes (B2/B, previous ratings B1/B) at par to yield 9 3/8%. The unsecured tranche was downsized from $2.5 billion and priced at the tight end of price talk, which had been set in the 9½% area.
Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the joint physical bookrunners.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BMO Capital Markets Corp., RBC Capital Markets, UBS Securities LLC and Nomura were the joint bookrunners.
The overall size of the bonds was decreased to $2.75 billion from $3 billion, with $250 million shifted to the company's term loan.
Covenant changes were announced along with the price talk and revised sizing on Monday.
Proceeds will be used to fund the leveraged buyout of the company by Apollo Global Management LLC, Riverstone Holdings LLC, Access Industries Inc. and other investors.
The issuer is a Houston-based oil and natural gas exploration and production company.
| Issuers: | Everest Acquisition LLC, Everest Acquisition Finance Inc. (EP Energy)
|
| Amount: | $2.75 billion, downsized from $3 billion with $250 million shifted to bank loan
|
| Joint physical bookrunners: | Citigroup Global Markets Inc., J.P. Morgan Securities LLC
|
| Joint bookrunners: | Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BMO Capital Markets Corp., RBC Capital Markets, UBS Securities LLC, Nomura
|
| Trade date: | April 10
|
| Settlement date: | April 24
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
|
|
| Senior secured notes
|
| Amount: | $750 million, increased from $500 million
|
| Maturity: | May 1, 2019
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Call protection: | Three years
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-, revised from BB
|
| Price talk: | 7% area
|
|
|
| Senior unsecured notes
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| Amount: | $2 billion
|
| Maturity: | May 1, 2020
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| Coupon: | 9 3/8%
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| Price: | Par
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| Yield: | 9 3/8%
|
| Call protection: | Four years
|
| Ratings: | Moody's: B2, revised from B1
|
| Standard & Poor's: B
|
| Price talk: | 9½% area
|
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