Published on 1/7/2021 in the Prospect News High Yield Daily.
New Issue: Hilcorp Energy prices upsized $1.2 billion of eight-, 10-year notes
By Paul A. Harris
Portland, Ore., Jan. 7 – Hilcorp Energy I, LP and Hilcorp Finance Co. priced an upsized $1.2 billion of senior notes (Ba3/BB-) in two tranches on Thursday, according to market sources.
The deal, which was upsized from $1 billion, came in an upsized $600 million tranche of eight-year notes, which priced at par to yield 5¾%. The tranche size increased from $500 million. The yield printed 12.5 basis points inside of price talk in the 6% area. Initial talk was 6¼% to 6½%
The deal also included an upsized $600 million tranche of 10-year notes, which priced at par to yield 6%. The tranche size increased from $500 million. The yield printed 12.5 bps inside of yield talk in the 6¼% area. Initial talk correctly had the 10-year notes yielding 25 bps behind the eight-year notes.
BofA Securities Inc. was the left bookrunner. Joint bookrunners were J.P. Morgan Securities LLC, RBC Capital Markets LLC, BBVA Securities Inc., Fifth Third Securities Inc., Mizuho Securities USA Inc., SMBC Nikko Securities America Inc., Truist Securities Inc. and U.S. Bancorp Investments Inc.
The Houston-based oil and gas exploration and production company plans to use the proceeds to fund a tender offer for its 5% senior notes due 2024 and 5¾% senior notes due 2025 and to pay down Hilcorp Energy I's senior secured credit facility or otherwise repurchase or redeem existing debt.
| Issuers: | Hilcorp Energy I, LP and Hilcorp Finance Co.
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| Amount: | $1.2 billion, increased from $1 billion
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| Securities: | Senior notes
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| Left bookrunner: | BofA Securities Inc.
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| Joint bookrunners: | J.P. Morgan Securities LLC, RBC Capital Markets LLC, BBVA Securities Inc., Fifth Third Securities Inc., Mizuho Securities USA Inc., SMBC Nikko Securities America Inc., Truist Securities Inc. and U.S. Bancorp Investments Inc.
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| Co-managers: | Capital One Securities Inc., Comerica Securities Inc., CIBC World Markets Corp. and DNB
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| Trade date: | Jan. 7
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| Settlement date: | Jan. 22
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| Ratings: | Moody's: Ba3
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| S&P: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Drive-by
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| Eight-year notes
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| Amount: | $600 million, increased from $500 million
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| Maturity: | Feb. 1, 2029
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| Coupon: | 5¾%
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| Price: | Par
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| Yield: | 5¾%
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| Spread: | 486 bps
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| Call protection: | Three years
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| Price talk: | 6% area
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| 10-year notes
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| Amount: | $600 million, increased from $500 million
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| Maturity: | Feb. 1, 2031
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| Coupon: | 6%
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| Price: | Par
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| Yield: | 6%
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| Spread: | 500 bps
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| Call protection: | Five years
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| Price talk: | 6¼% area
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