By Angela McDaniels
Tacoma, Wash., June 4 – Anadarko Petroleum Corp. priced $400 million of 7.5% tangible equity units exchangeable into common units of Western Gas Equity Partners LP, according to a company news release.
The registered offering was upsized from $325 million, and it was talked to yield 7.5% to 8% with an initial conversion premium of 20% to 25%, according to market sources.
Each $50-par unit is comprised of a prepaid equity purchase contract and a senior amortizing note.
Unless earlier settled, each prepaid equity purchase contract will automatically settle on June 7, 2018 for between 0.7159 and 0.8591 Western Gas Equity Partners common units, subject to adjustments and subject to Anadarko's right to elect to deliver shares of its own common stock in lieu of Western Gas Equity Partners common units.
The number of Western Gas Equity Partners common units to be delivered will be based on the average of the daily volume-weighted average prices of its common units for the 20 consecutive trading days beginning on the 23rd trading day immediately preceding June 7, 2018.
Each amortizing note will pay equal quarterly installments of $0.9375. These quarterly installment payments will constitute a payment of interest and a partial repayment of principal.
The amortizing notes have a final installment payment date of June 7, 2018.
The Western Gas Equity Partners common units that may be delivered to settle the equity purchase contracts are owned by a wholly owned subsidiary of Anadarko.
Anadarko also priced a $116.4 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.
J.P. Morgan Securities LLC was the bookrunner for the tangible equity units offering and joint bookrunner for the secondary offering.
There is a $60 million greenshoe for the tangible equity units offering and a $17.46 million greenshoe for the secondary offering.
The tangible equity units are non-callable and have takeover and dividend protection.
Proceeds will be used for Anadarko's general corporate purposes.
Anadarko is an oil and gas exploration and production company based in the Woodlands, Texas.
| Issuer: | Anadarko Petroleum Corp.
|
| Issue: | Tangible equity units
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Units: | 8 million
|
| Maturity: | June 7, 2018
|
| Concurrent offering: | $116.4 million follow-on offering of common units of Western Gas Equity Partners LP
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Distribution rate: | 7.5%
|
| Price: | Par of $50
|
| Minimum settlement rate: | 0.7159 units
|
| Maximum settlement rate: | 0.8591 units
|
| Price talk: | 7.5% to 8%, up 20% to 25%
|
| Pricing date: | June 4
|
| Settlement date: | June 10
|
| Common units listing: | NYSE: WGP
|
| Common units price: | $58.20 at close June 4
|
| Market capitalization: | $12.74 billion
|
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