Talos Energy markets $400 million five-year secured notes; initial talk 12% coupon with OID

By Paul A. Harris

Portland, Ore., Dec. 14 – Talos Energy Inc. started a roadshow on Monday for a $400 million offering of five-year second-priority senior secured notes, according to market sources.

Early guidance has the notes coming with a 12% coupon at a discount price of 90 to 92, a trader said.

The Rule 144A and Regulation S deal is expected to price on Thursday.

J.P. Morgan Securities LLC is the lead.

The Rule 144A and Regulation S notes come with two years of call protection.

The issuing entity will be Talos Production Inc., a wholly owned subsidiary of Talos Energy.

The Houston-based oil and gas company plans to use the proceeds to redeem the Talos Production 11% second-priority senior secured notes due 2022, with any remaining proceeds to be used for general corporate purposes, which may include paying down the reserves-based lending facility.

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