Published on 11/17/2016 in the Prospect News High Yield Daily.
New Issue: EP Energy prices upsized, restructured $500 million eight-year notes at par to yield 8%
By Paul A. Harris
Portland, Ore., Nov. 17 – EP Energy LLC priced an upsized and restructured $500 million issue of eight-year senior secured notes (B3/BB-) at par to yield 8% on Thursday, according to a syndicate source.
The issue size was increased from $350 million.
The maturity was increased to eight years from seven years. Although the length of call protection remained unchanged at three years, the call premiums increased. The first call premium is par plus 75% of the coupon, increased from 50% of the coupon.
The yield printed at the tight end of the 8% to 8¼% yield talk.
Goldman Sachs & Co. was the left bookrunner. Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and RBC Capital Markets were the joint bookrunners.
The Houston-based oil and natural gas exploration and production company plans to use the proceeds, including those additional proceeds resulting from the $150 million upsizing of the deal, to repay its RBL facility and/or for general corporate purposes.
| Issuer: | EP Energy LLC
|
| Amount: | $500 million, increased from $350 million
|
| Maturity: | Nov. 29, 2024
|
| Securities: | Senior secured notes
|
| Left bookrunner: | Goldman Sachs & Co.
|
| Joint bookrunners: | Credit Suisse Securities (USA) LLC, J.P. Morgan Securities, Citigroup Global Markets Inc., RBC Capital Markets LLC
|
| Senior co-managers: | BMO Capital Markets Corp., Deutsche Bank Securities Inc., UBS Securities LLC
|
| Co-managers: | Apollo Global Securities LLC, Riverstone Capital Services LLC, Capital One Securities Inc., CIBC World Markets Corp., BBVA Securities Inc., SG Americas Securities LLC, SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC, SMBC Nikko Securities America Inc., DNB Markets Inc., Citizens Capital Markets Inc., ING Financial Markets LLC, Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, Comerica Securities Inc., Nomura Securities International Inc.
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Spread: | 584 bps
|
| Call: | Make-whole call until Nov. 29, 2019, then callable at 106 (first call premium increased to 75% of coupon from 50% of coupon)
|
| Equity clawback: | 35% at 108 until Nov. 29, 2019
|
| Trade date: | Nov. 17
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| Settlement date: | Nov. 29
|
| Ratings: | Moody's: B3
|
| S&P: BB-
|
| Distribution: | Rule 144A for life and Regulation S
|
| Price talk: | 8% to 8¼%
|
| Marketing: | Roadshow
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