Extraction Oil & Gas talks $500 million five-year senior notes to yield in 8% area

By Paul A. Harris

Portland, Ore., July 13 – Extraction Oil & Gas Holdings, LLC and Extraction Finance Corp. talked a $500 million offering of five-year senior notes (Caa1/B-) to yield in the 8% area, a syndicate source said.

Books close at 1 p.m. ET on Wednesday, and the Rule 144A and Regulation S for life deal is expected to price thereafter.

Official talk comes tight to initial guidance in the low-to-mid 8% yield context, according to a trader.

Barclays is the lead left bookrunner. Goldman Sachs & Co., RBC Capital Markets and Wells Fargo Securities LLC are the joint bookrunners.

KeyBanc Capital Markets and SunTrust Robinson Humphrey Inc. are the senior co-managers. ABN Amro, Bank of Oklahoma, Fifth Third Securities, Moelis & Co. and MUFG are the co-managers.

The notes become callable after two years at par plus 50% of the coupon and feature a two-year 35% equity clawback and a 101% poison put.

The Denver-based oil and gas producer plans to use the proceeds to repay and retire its second-lien term loan, to pay the associated prepayment premium and to repay debt under its existing revolver.

Extraction Oil & Gas is focused on Central Colorado’s Wattenberg Field.

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