By Paul A. Harris
Portland, Ore., Nov. 19 – American Energy – Permian Basin, LLC priced a downsized and restructured $530 million issue of five-year senior secured first-lien notes (B2/B) at par to yield 13% on Thursday, according to a market source.
The deal was downsized from $560 million.
The yield printed on top of yield talk.
Call protection was increased to three years from two years; the notes become callable after three years at par plus the full coupon.
The term of the equity clawback was extended to three years from two years.
The deal kicked off in mid-October and spent much of the intervening time on the sidelines of the high-yield primary market, as price talk increased from initial guidance in the 9% area.
There were also covenant changes.
Goldman Sachs & Co. was the left bookrunner. Jefferies LLC and BofA Merrill Lynch were the joint bookrunners.
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 $305 million as of Nov. 16. In conjunction with the note offering, the revolving credit facility is being amended to set the borrowing base at zero. All maintenance covenants are suspended as long as the borrowing base remains zero.
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.
| Issuer: | American Energy – Permian Basin, LLC
|
| Amount: | $530 million, decreased from $560 million
|
| Maturity: | November 2020
|
| Securities: | Senior secured first-lien notes
|
| Left bookrunner: | Goldman Sachs & Co.
|
| Joint bookrunners: | Jefferies LLC, BofA Merrill Lynch
|
| Co-managers: | Morgan Stanley & Co. LLC, MUFG, Wells Fargo Securities LLC
|
| Coupon: | 13%
|
| Price: | Par
|
| Yield: | 13%
|
| Call: | Callable after three years at 113 (call protection increased from two years)
|
| Equity clawback: | 50% at 113 for three years (increased from two years)
|
| Trade date: | Nov. 19
|
| Settlement: | Nov. 25
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Final price talk: | 13%
|
| Marketing: | Roadshow
|
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