By Rebecca Melvin
New York, March 19 - Sanchez Energy Corp. priced $225 million of perpetual convertible preferred stock, which has a $50.00 liquidation price, with a dividend of 6.5% and a 10% initial conversion premium, according to a syndicate source.
The Rule 144A eligible series B preferreds were priced via RBC Capital Markets LLC as structuring agent and placement agent.
The perpetual preferred stock is mandatorily convertible at the issuer's option on or after April 6, 2018 if the company's common stock exceeds 130% of the effective conversion price for 20 out of 30 days.
Proceeds will be used specifically to fund a portion of the $265 million purchase price of its previously announced acquisition of certain Eagle Ford Shale assets.
Closing is expected March 26.
Houston-based Sanchez Energy is an oil and natural gas exploration and development company.
| Issuer: | Sanchez Energy Corp.
|
| Issue: | Convertible perpetual preferred stock (4.5 million shares)
|
| Amount: | $225 million
|
| Maturity: | Perpetual
|
| Placement agent: | RBC Capital Markets LLC
|
| Dividend: | 6.5%
|
| Liquidation price: | $50.00
|
| Yield: | 6.5%
|
| Initial conversion premium: | 10%
|
| Initial conversion price: | $21.40 approximately
|
| Calls: | Non-callable until April 6, 2018 and then convertible at the issuer's option at a 130% price hurdle
|
| Distribution: | Rule 144A eligible
|
| Pricing date: | March 18
|
| Settlement date: | March 26
|
| Stock symbol: | NYSE: SN
|
| Stock price: | $19.45, as of close March 18
|
| Market capitalization: | $635 million
|
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