Anadarko plans $325 million exchangeable equity units to yield 7.5%-8%, up 20%-25%

By Rebecca Melvin

New York, June 3 – Anadarko Petroleum Corp. launched an offering of $325 million tangible equity units, exchangeable into shares of Western Gas Equity Partners LP, which were talked to yield 7.5% to 8% with an initial conversion premium of 20% to 25%, according to market sources.

Anadarko is also pricing a $125 million follow-on offering of common units of Western Gas Equity Partners, with Anadarko as selling shareholder.

Western Gas Equity Partners is a subsidiary of Anadarko formed to own partnership interests in Western Gas Partners LP, a separate subsidiary formed to acquire and develop midstream energy assets.

The registered, three-year mandatory exchangeables have an over-allotment option of $48.75 million and were being sold via bookrunner J.P. Morgan securities LLC.

The mandatory deal of $50 par units was expected to price after the market close on Thursday. It is non-callable and has takeover and dividend protection.

Proceeds are earmarked for general corporate purposes.

Anadarko is an oil and gas exploration and production company based in the Woodlands, Texas.

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