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Earthstone Energy driving by with $500 million eight-year notes; initial talk 10%-10¼%
By Paul A. Harris
Portland, Ore., June 27 – Earthstone Energy Holdings, LLC plans to price a $500 million offering of senior notes due 2031 (B3/B+/B+) in a Tuesday drive-by trailing a conference call with investors, according to market sources.
Initial talk has the deal coming to yield 10% to 10¼%, a bond trader said.
The Rule 144A and Regulation S for life eight-year notes become callable after three years at par plus 50% of the coupon.
Wells Fargo Securities LLC is the left active bookrunner, RBC Capital Markets LLC and Truist Securities Inc. are the joint active bookrunners.
BofA Securities Inc., Capital One Securities Inc., Citizens Capital Markets Inc., Fifth Third Securities Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, U.S. Bancorp Investments Inc. and J.P. Morgan Securities LLC are the joint bookrunners.
Regions Securities LLC, BOK Financial Securities Inc., FHN Financial Securities Corp. and Comerica Securities Inc. are the co-managers.
The Woodlands, Tex.-based independent oil and gas producer plans to use the proceeds to fund its acquisition of Novo Oil & Gas Holdings, LLC. Pending the close of that acquisition, the proceeds may be applied to Earthstone’s revolver debt.
The notes feature a mandatory redemption at par plus accrued interest if the acquisition is not consummated on or prior to Aug. 28, 2023.
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