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American Energy – Permian Basin launches upsized $1.6 billion senior notes in three tranches
By Paul A. Harris
Portland, Ore., July 16 – American Energy – Permian Basin, LLC launched an upsized $1.6 billion three-part offering of senior notes (Caa1/CCC ) on Wednesday morning, setting out tranches sizes and coupons, a market source said.
A $350 million tranche of Libor plus 650 basis points five-year floating-rate notes, which come with one year of call protection, launched at 99, on top of price talk; initial guidance was Libor plus 600 bps.
The launch also includes a $650 million tranche of 7 1/8% 6.25-year fixed-rate notes with 2.5 years of call protection. Yield talk is in the 7¼% area; initial guidance was in the mid-7% range.
In addition the launch includes a $600 million tranche of 7 3/8% 7.25-year fixed-rate notes with three years of call protection. Price talk was in the 7½% area; initial guidance was in the high-7% range.
The overall size of the three-part transaction was increased from $1.4 billion.
Reconfirmations were due at 11 a.m. ET Wednesday, and the deal is set to price Wednesday afternoon, subject to reconfirmations following the upsize.
Goldman Sachs & Co. is the bookrunner for the Rule 144A and Regulation S for life deal.
BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Jefferies LLC are the senior co-managers.
HSBC, MUFG, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are the co-managers.
The Oklahoma City-based company plans to use the proceeds as part of the financing for the proposed acquisition of the Permian Basin business and assets of Enduring Resources II, LLC, as well as for general corporate purposes. The additional proceeds resulting from the $200 million upsizing of the transaction will be used to eliminate a previously anticipated $129 million draw on the company’s revolver and for general corporate purposes.
The prospective issuer is an energy company involved in onshore U.S. unconventional resource plays.
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