American Energy – Permian Basin to sell $530 million five-year notes Thursday; talk is 12% minimum

By Paul A. Harris

Portland, Ore., Nov. 18 – American Energy – Permian Basin, LLC is expected to price its downsized $530 million offering of five-year senior secured first-lien notes (B2/B) on Thursday, traders say.

The deal, which kicked off in mid-October and has spent much of the intervening time on the sidelines of the high-yield primary market, has “baseline price talk” of 12% minimum, a source said on Wednesday.

The deal has been subjected to covenant changes.

At least two revised offering documents were circulated subsequent to the deal’s October launch, sources say.

Goldman Sachs & Co. is the left bookrunner for the Rule 144A and Regulation S for life offering, which was downsized from $560 million. Jefferies LLC and BofA Merrill Lynch were the joint bookrunners.

Morgan Stanley & Co. LLC, MUFG and Wells Fargo Securities LLC are the co-managers.

The notes come with two years of call protection.

The Oklahoma City-based independent oil and gas company plans to use the proceeds to repay all borrowings currently outstanding under its revolver, the amount of which was $201 million as of Sept. 30, 2015.

Proceeds will also possibly be used to fund the remaining portion of the pending acquisition of Enduring Resources LLC.

Any additional proceeds will be used to fund drilling and completion activities, for infrastructure development and for general corporate purposes.

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