Tom Brown starts roadshow Friday for $225 million 10-year notes

By Paul A. Harris

St. Louis, Sept. 4 - Tom Brown, Inc. starts the roadshow Friday for an offering of $255 million senior subordinated notes due 2013 (expected ratings Ba3/BB-), according to a syndicate source.

The deal is expected to price late in the week of Sept. 8.

Goldman Sachs & Co. is bookrunner for the off-the-shelf notes. JPMorgan and Merrill Lynch are joint leads. BNP Paribas, Citigroup, Scotia Capital and Wachovia are co-managers.

The offering will be comprised of units. Each $1,000 par value unit will be comprised of $512 principal amount of Tom Brown, Inc. notes and $488 principal amount of Tom Brown Resources Funding Corp. notes. Resources Funding Corp. is a Canadian entity and its notes will be fully guaranteed by Tom Brown, Inc., according to the source.

Although comprised of two different notes the units will price with one single Cusip number, the source added.

The bonds will be marketed on a concurrent roadshow with an offering of 7.5 million common shares via JP Morgan.

Proceeds from the 10-year non-call-five notes will be used to repay debt incurred in the acquisition of Matador Petroleum Corp. and to repay other debt.

The Denver-based firm is an independent oil and gas exploration and production company.

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