Pioneer Natural Resources to price $1 billion five-year convertibles at 0%-0.5%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., May 11 – Pioneer Natural Resources Co. plans to price $1 billion of five-year convertible notes after the market close on Monday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC are active bookrunners for the Rule 144A offering, which carries a greenshoe of $150 million.

The notes are non-callable until May 20, 2023 and then subject to a 130% hurdle. There is dividend protection above 55 cents a quarter and takeover protection.

In connection with the pricing, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, repurchase up to $50 million of common stock and fund a tender offer for up to $500 million of its 3.45% senior notes due 2021, 3.95% senior notes due 2022 and 7.2% senior notes due 2028.

Pioneer Natural Resources is a Dallas-based oil and gas exploration and production company.

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