Rex Energy to price $125 million perpetual convertible preferreds to yield 5.5%-6%, up 25%-30%

By Rebecca Melvin

New York, Aug. 12 – Rex Energy Corp. launched an offering of $125 million of perpetual convertible preferred stock after the market close on Tuesday that was expected to price ahead of the market open on Wednesday.

The offering was talked to yield a dividend of 5.5% to 6% with an initial conversion premium of 25% to 30%, according to a market source.

The registered deal has greenshoe of $18.75 million and was being sold via RBC Capital Markets LLC.

The preferred shares are non-callable for five-years and then provisionally callable subject to shares exceeding 130% of the conversion price.

Proceeds are earmarked to fund the company’s Appalachian Basin acreage acquisition from SWEPI LP, an affiliate of Royal Dutch Shell plc, with the remainder of proceeds to fund capital expenditures and for general corporate purposes.

Rex Energy is a State College, Pa.-based exploration and production company.

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