New Issue: Houston Exploration upsizes 10-year notes to $175 million, yield 7%

By Paul A. Harris

St. Louis, June 5 - Houston Exploration Co. priced an upsized issue of $175 million senior subordinated notes due June 15, 2013 (B2/B+) Thursday at par to yield 7%, according to a syndicate source.

Price talk was 7%-7¼%. The deal was increased from $150 million.

Wachovia Securities, Inc. was the bookrunner for the Rule 144A offering. Lehman Brothers, BNP Paribas, Fleet Securities and Scotia Capital were co-managers.

The Houston-based oil and gas exploration and production company will use proceeds to call its 8 5/8% senior subordinated notes.

Issuer:	Houston Exploration Co.
Amount:	$175 million (increased from $150 million)
Maturity:	June 15, 2013
Security description:	Senior subordinated notes
Bookrunner:	Wachovia Securities
Co-managers:	Lehman Brothers BNP Paribas, Fleet Securities, Scotia Capital
Coupon:	7%
Price:	Par
Yield:	7%
Spread:	368 basis points
Call features:	Callable on June 15, 2008 at 103.5, then at 102.333, 101.167, declining to par on June 15, 2011 and thereafter
Equity clawback:	Until June 15, 2006 for 35% at 107
Settlement date:	June 10, 2003
Ratings:	Moody's: B2
	Standard & Poor's: B+
Price talk:	7%-7¼%
Distribution:	Rule 144A

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