Bonanza Creek/Civitas to price $400 million notes on Wednesday; initial talk low-to-mid 5% area

By Paul A. Harris

Portland, Ore., Oct. 5 – Bonanza Creek Energy, Inc., along with post-merger entity Civitas Resources, Inc., expects to price $400 million of five-year senior notes (B1) on Wednesday, according to market sources.

The deal, which was set to kick off on a Tuesday conference call with investors, is in the market with initial guidance in the low-to-mid 5% area.

BofA Securities Inc. is the left active bookrunner. J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are the joint active bookrunners. Fifth Third Securities Inc., KeyBanc Capital Markets Inc., PNC Capital Markets LLC, Truist Securities Inc. and U.S. Bancorp Investments Inc. are the joint bookrunners.

Petrie, Capital One Securities Inc., BOK Financial Securities Inc. and Comerica Securities Inc. are the co-managers.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon.

The notes will be initially issued by Bonanza Creek Energy, which will be renamed Civitas Resources following the $2.6 billion merger of Bonanza Creek Energy and Extraction Oil & Gas.

Proceeds plus cash on hand will be used to pay off the CPPIB Crestone Peak Resources America Inc. credit facility, to repay debt under Bonanza Creek’s credit facility and for general corporate purposes.

There is a mandatory call at par plus accrued interest if the merger does not close by Dec. 31, 2021.

Civitas Resources will be a Denver-based energy exploration and production company.

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