Emerald Oil to price $125 million five-year convertibles to yield 1.75%-2.25%, up 32.5%-37.5%

By Rebecca Melvin

New York, March 17 - Emerald Oil Inc. launched an offering of $125 million five-year convertible senior notes after the market close on Monday that were seen pricing after the market close on Tuesday and were talked to yield 1.75% to 2.25% with a 32.5% to 37.5% initial conversion premium, according to market sources.

The Rule 144A offering has a greenshoe for up to an additional $18.75 million of notes.

Joint book-running managers are Credit Suisse Securities (USA) LLC and Barclays.

The notes are non-callable. They will be settled in shares. They also have standard change-of-control protection with a make-whole table and anti-dilution adjustments and dividend protection via adjustment to the conversion rate for any dividends paid.

Proceeds will be used to repay all of the outstanding borrowings under a revolving credit facility and for general corporate purposes, including funding a portion of the company's drilling and development program and potential acquisitions.

Emerald Oil is a Denver-based independent oil and natural gas exploration and production company with operations primarily in North Dakota and Montana.

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