By Paul A. Harris
Portland, Ore., June 29 - Halcon Resources Corp. priced an upsized $750 million issue of 9¾% eight-year senior notes (B3/CCC+/) at 98.646 to yield 10% on Friday, according to a syndicate source.
The yield printed on top of price talk, which had been revised from earlier talk in the 9% area.
Barclays Capital Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp. and RBC Capital Markets are the joint bookrunners.
Capital One Southcoast Inc., SunTrust Robinson Humphrey and Global Hunter Securities are the co-managers.
The Houston-based oil and gas acquisition, production, exploration and development company plans to use the proceeds to help fund its merger with GeoResources Inc. in a transaction valued at about $1 billion.
Proceeds will also be used to acquire other potential properties and for general corporate purposes.
Pending the completion of the merger, the proceeds will be used to fund an escrow account.
Under the merger agreement, GeoResources stockholders will receive $20 in cash and 1.932 shares of Halcon Resources common stock per share.
Closing is expected in the third quarter, subject to the approval of the stockholders of both companies, as well as other customary approvals.
In connection with the merger, Halcon Resources plans on putting in place a new revolver with an estimated size of $475 million.
| Issuer: | Halcon Resources Corp.
|
| Amount: | $750 million, increased from $500 million
|
| Maturity: | July 15, 2020
|
| Securities: | Senior notes
|
| Bookrunners: | Barclays Capital Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp., RBC Capital Markets
|
| Co-managers: | Capital One Southcoast Inc., SunTrust Robinson Humphrey Inc., Global Hunter Securities
|
| Coupon: | 9¾%
|
| Price: | 98.646
|
| Yield: | 10%
|
| Spread: | 837 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until July 15, 2016, then callable at 104.875, 102.438, par on and after July 15, 2018 (call protection increased from three years)
|
| Equity clawback: | 35% at 109.75 until July 15, 2015
|
| Trade date: | June 29
|
| Settlement date: | July 16
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 10% area, increased from 9% area
|
| Marketing: | Roadshow
|
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