By Rebecca Melvin
New York, Feb. 20 - American Energy - Utica LLC, an affiliate of American Energy Partners LP, priced an upsized $750 million of 3.5% seven-year convertible subordinated notes in a Rule 144A offering that was initially talked at $500 million in size, according to a news release.
Pricing came at the midpoint of 3% to 4% coupon talk.
Jefferies LLC, Citigroup Global Markets Inc. and Goldman Sachs & Co. were joint bookrunners of the offering.
The notes are convertible upon a registered public offering of American Energy - Utica into shares of common stock sold in that offering. Conversions are contingent on there being a public offering.
At conversion, holders will receive a number of shares equal to the greater of (x) $750 million divided by a conversion price equal to an agreed discount to the public offering price and (y) 15% of the equity value of American Energy - Utica at the time of the public offering.
The bonds are non-callable until there is a public offering.
Concurrently with the closing of the notes offering, American Energy - Utica will enter into an amendment of its senior secured credit facility to provide for $500 million of incremental borrowings under its term loan facility, which increases American Energy - Utica's total borrowing capacity to $950 million.
Proceeds from the offering and the incremental term loan borrowings will be used to facilitate the funding of its pending leasehold acquisitions and planned capital expenditures for its drilling and development program in southern Utica Shale.
Oklahoma City-based American Energy is involved in onshore U.S. unconventional resource plays.
| Issuer: | American Energy - Utica LLC
|
| Guarantor: | American Energy Partners LP
|
| Issue: | Convertible subordinated notes
|
| Amount: | $750 million, upsized from $500 million
|
| Maturity: | March 1, 2021
|
| Bookrunners: | Jefferies LLC, Citigroup Global Markets Inc., Goldman Sachs & Co.
|
| Coupon: | 3.5%
|
| Calls: | Callable upon an initial public offering of shares
|
| Price talk: | 3%-4%
|
| Pricing date: | Feb. 19
|
| Settlement date: | Feb. 27
|
| Distribution: | Rule 144A
|
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