By Paul Deckelman
New York, March 31 - Exterran Partners, L.P. and its EXLP Finance Corp. funding subsidiary priced an upsized $350 million of 8.5-year senior notes (B1/B) on Monday, high-yield syndicate sources said.
The offering was upsized from an originally announced $300 million.
The quick-to-market offering is being sold under Rule 144A/Regulation S with regulation rights.
Wells Fargo Securities LLC, Credit Agricole Securities (USA) Inc., RBS Securities Inc., BofA Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets Corp. and Goldman Sachs & Co. were the bookrunners on the deal.
BBVA Securities Inc., Capital One Securities, Inc., SMBC Nikko Securities America, Inc., BB&T Capital Markets, Citigroup Global Markets Inc., Mitsubishi UFJ Securities (USA) Inc., Regions Securities LLC and Scotia Capital (USA) Inc. were co-managers.
The notes will have call protection for the first four years after issue.
There is a standard 35% three-year equity clawback provision and a change of control put at 101%.
Exterran, a Houston-based provider of natural gas contract operations services to customers throughout the United States, plans to use about $201.1 million of the expected net proceeds from the offering to fund a portion of the purchase price of its pending $360 million acquisition of natural gas compression assets from Chesapeake Energy Corp. subsidiary MidCon Compression, LLC and for the repayment of borrowings outstanding under its revolving credit facility.
The company said that amounts repaid under its revolving credit facility may be reborrowed in accordance with the terms of the facility. Pending such use, all of the proceeds from this offering - less the initial purchaser discounts - will be placed into an escrow account.
There is a special mandatory redemption provision; the proceeds from the deal will be placed in escrow pending the anticipated completion of the MidCon transaction.
However, if that acquisition is not completed by July 7, or should the related purchase agreement between the two companies be terminated before the transaction is completed, the escrowed funds will be applied to the mandatory redemption of all of the notes at par plus accrued and unpaid interest.
| Issuers: | Exterran Partners, LP and Exterran Finance Corp.
|
| Face Amount: | $350 million (upsized from original $300 million)
|
| Gross proceeds: | $344,298,500
|
| Net proceeds: | About $337.4 million
|
| Security description: | Senior notes
|
| Maturity: | Oct. 1, 2022
|
| Bookrunners: | Wells Fargo Securities LLC, Credit Agricole Securities (USA) Inc., RBS Securities Inc., BofA Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets Corp. and Goldman Sachs & Co.
|
| Co-managers: | BBVA Securities Inc., Capital One Securities, Inc., SMBC Nikko Securities America, Inc., BB&T Capital Markets, Citigroup Global Markets Inc., Mitsubishi UFJ Securities (USA) Inc., Regions Securities LLC and Scotia Capital (USA) Inc.
|
| Coupon: | 6%
|
| Price: | 98.371
|
| Yield: | 6¼%
|
| Spread: | 370 bps vs 1.625% Treasury due Aug. 15, 2022
|
| Call structure: | Non-call until April 1, 2018, other than make-whole call at T+50 bps; callable on or after April 1, 2018 at 103, then at 101.5 and finally at par on or after April 1, 2020
|
| Equity clawback: | Up to 35% of issue at 106% before April 1. 2017
|
| Special mandatory redemption: | At par, plus accrued interest, using escrowed proceeds, if the acquisition of the MidCon assets by Exterran is not completed by July 7
|
| Change-of-control: | Putable at 101% of principal plus accrued interest
|
| Ratings: Moody's: B1
|
| S&P: B
|
| Trade date: | March 31
|
| Settlement date: | April 7 (T+5)
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Marketing: | Quick to market
|
| Price talk: | 6 3/8% area
|
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