Whiting Oil & Gas CFO undeterred by news of outflows from high-yield funds

By Paul A. Harris

St. Louis, April 23 - Jim Casperson, chief financial officer of Denver-based Whiting Oil & Gas, thinks it is an excellent time to tap the junk bond market, even though the market heard evidence last Thursday that cash is flowing out of the high-yield asset class.

Casperson told Prospect News on Friday that he was aware that AMG Data Services had reported a $425.8 million outflow from the high-yield mutual funds for the week ending April 21.

He also said that it is conceivable that the news could cost his company 15 to 25 basis points in yield when it prices its offering of $150 million of new eight-year senior subordinated notes (B-). A roadshow for the notes is scheduled to begin Monday.

Casperson's response: "Rates are still very attractive."

"I can remember when the prime rate was 16%," he added. "Back then, if you had told people that they could rent money for a period of eight to 10 years at the rates we're currently seeing you would have had to put up machine guns outside the bank to hold them at bay.

"There are indications that interest rates are going to go up. So right now, if you're a businessman, you need to take a long-term approach.

"Six years from now I think you will look at the interest rate that you can get in this market, right now, and feel as though you did pretty well."

Casperson declined to specify where he anticipated Whiting's new eight-year notes, which are non-callable for four years, would price. But he said he expects the rate to be in line with what the market currently supports for small- to mid-cap companies.

The bank debt refinancing deal, via Merrill Lynch & Co. and Lehman Brothers, is on the road through May 5.

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