By Paul Deckelman
New York, June 22 - Hilcorp Energy Co. was heard to have successfully priced $200 million of 10-year senior notes at par to yield 9%, a spread of 381 basis points over Treasuries junk bond market sources said Thursday.
Joint bookrunners for the Rule 144A for life deal were Lehman Brothers and Deutsche Bank Securities. JP Morgan, Wachovia Securities and Harris Nesbitt were co-managers for the offering.
The notes are non-callable for the first five years, other than a make-whole call at 50 bps over Treasuries. There is also an equity clawback provision in effect for the first three years, allowing the buyback of up to 35% of the bonds with any stock-sale proceeds.
The Houston-based independent oil and gas exploration and development company actually issued the bonds through its Hilcorp Energy I and Hilcorp Finance Co. subsidiaries.
The deal, which first emerged on the radar screen last Friday, was sold to investors on a roadshow that started Monday and wrapped up on Thursday.
The new bonds carry a B3 rating from Moody's Investors Service, and a B rating from Standard & Poor's.
Proceeds will be used to repay bank debt incurred to fund acquisitions.
Privately held Hilcorp was formed in 1988 for the express purpose of acquiring and exploiting producing oil and gas properties. Since its inception, Hilcorp has consummated over 300 acquisitions, generally seeking to acquire properties deemed non-strategic by large oil and gas companies yet still possessing significant profit and upside potential. Hilcorp Energy also owns gas processing and gas gathering facilities.
| Issuers: | Hilcorp Energy I, Hilcorp Finance Co.
|
| Amount: | $200 million
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| Issue: | Senior notes
|
| Maturity: | June 1, 2016
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| Bookrunners: | Lehman Brothers, Deutsche Bank Securities (joint)
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| Co-managers: | JP Morgan, Wachovia Securities, Harris Nesbitt
|
| Coupon | 9%
|
| Price: | Par
|
| Yield: | 9%
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| Spread: | 381 basis points over Treasuries
|
| Call schedule: | Make-whole call at 50 bps over Treasuries for first five years of issue, then calls at premium
|
| Settlement: | June 27
|
| Ratings: | Moody's: B3
|
| S&P: B |
|
| Distribution: | Rule 144A for life
|
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