Published on 11/3/2023 in the Prospect News High Yield Daily.
New Issue: Hilcorp Energy prices upsized $600 million 10-year unsecured notes at par to yield 8 3/8%
By Paul A. Harris
Portland, Ore., Nov. 3 – Hilcorp Energy I, LP and Hilcorp Finance Co. priced an upsized $600 million issue of senior secured notes due November 2033 (Ba2/BB+) at par to yield 8 3/8% in a Friday drive-by, according to market sources.
The issue size increased from $500 million.
The yield printed at the tight end of the 8 3/8% to 8 5/8% yield talk and half a point below the wide end of initial guidance in the 8¾% area.
Joint lead bookrunners were RBC Capital Markets, LLC and J.P. Morgan Securities LLC. Joint bookrunners were Capital One Securities, Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC, SMBC Nikko Securities America, Inc., Truist Securities, Inc. and U.S. Bancorp Investments, Inc.
The Houston-based, privately owned oil and natural gas producer plans to use the proceeds to repay a portion of its reserve-based lending borrowings and for general partnership purposes.
The incremental proceeds resulting from the $100 million upsizing of the deal will also be applied to the reserve-based lending borrowings.
| Issuers: | Hilcorp Energy I, LP and Hilcorp Finance Co.
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| Amount: | $600 million, increased from $500 million
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| Issue: | Senior notes
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| Maturity: | Nov. 1, 2033
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| Joint lead bookrunners: | RBC Capital Markets, LLC and J.P. Morgan Securities LLC
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| Joint bookrunners: | Capital One Securities, Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC, SMBC Nikko Securities America, Inc., Truist Securities, Inc. and U.S. Bancorp Investments, Inc.
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| Co-managers: | Comerica Securities, Inc., Zions Direct, Inc. and FHN Financial Securities Corp.
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| Coupon: | 8 3/8%
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| Price: | Par
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| Yield: | 8 3/8%
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| First call: | Nov. 1, 2028 at 104.188
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| Trade date: | Nov. 3
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| Settlement date: | Nov. 8
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| Ratings: | Moody’s: Ba2
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| S&P: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 8 3/8% to 8 5/8%
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| Marketing: | Drive-by
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