Published on 2/7/2018 in the Prospect News High Yield Daily.
New Issue: Sanchez Energy sells upsized $500 million 7¼% five-year notes at 98.973 to yield 7½%
By Paul A. Harris
Portland, Ore., Feb. 7 – Sanchez Energy Corp. priced an upsized $500 million issue of 7¼% five-year senior secured first-lien notes (B1/BB-) at 98.973 to yield 7½% on Wednesday, according to market sources.
The issue size was increased from $400 million.
The yield printed at the tight end of the 7½% to 7¾% yield talk, which came tight to initial guidance in the high 7% area.
Citigroup Global Markets Inc. was the left joint global coordinator. J.P. Morgan Securities LLC and RBC Capital Markets LLC were also joint global coordinators. ABN Amro, Capital One, ING and SunTrust Robinson Humphrey Inc. were joint bookrunners.
The notes are secured by a first priority lien on 85% of the proved reserves of Sanchez Energy and its restricted subsidiaries.
The Houston-based oil and gas exploration and development company plans to use the proceeds to repay borrowings under its existing RBL credit facility and for general corporate purposes, including capital expenditures.
Sanchez Energy is focused on the exploration, acquisition and development of unconventional oil and natural gas resources in the onshore U.S. Gulf Coast with a current focus on the Eagle Ford Shale in South Texas and, to a lesser extent, the Tuscaloosa Marine Shale in Mississippi and Louisiana.
| Issuer: | Sanchez Energy Corp.
|
| Amount: | $500 million, increased from $400 million
|
| Maturity: | Feb. 15, 2023
|
| Securities: | Senior secured first-lien notes
|
| Left global coordinator: | Citigroup Global Markets Inc.
|
| Joint global coordinators: | J.P. Morgan Securities LLC, RBC Capital Markets LLC
|
| Joint bookrunners: | ABN Amro, Capital One, ING, SunTrust Robinson Humphrey Inc.
|
| Senior co-managers: | Fifth Third Bank, BB&T Securities, CIBC World Markets, Comerica Securities, Iberia, Natixis, PNC Capital Markets, SG CIB, Intrepid
|
| Co-managers: | BOK Financial, Citizens Bank, Credit Agricole CIB, Huntington Capital Markets, Macquarie Capital, SMBC Nikko
|
| Coupon: | 7¼%
|
| Price: | 98.973
|
| Yield: | 7½%
|
| Spread: | 495 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2020, then callable at 103.625
|
| Equity clawback: | 35% at 107.25 until Feb. 15, 2020
|
| Trade date: | Feb. 7
|
| Settlement date: | Feb. 14
|
| Ratings: | Moody's: B1
|
| S&P: BB-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 7½% to 7¾%
|
| Marketing: | Investor call
|
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