EP Energy talks $1 billion eight-year secured notes to yield 7¼%-7½%; pricing Friday

By Paul A. Harris

Portland, Ore., May 18 – EP Energy Corp. talked its $1 billion offering of eight-year 1.125 lien senior secured notes (B1/B) to yield 7¼% to 7½%, according to a syndicate source.

Books close at 2 p.m. ET on Friday, and the deal is set to price thereafter.

Credit Suisse Securities (USA) LLC is the lead left bookrunner for the Rule 144A and Regulation S for life offering. Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets LLC, BMO Securities, Deutsche Bank Securities Inc., TD Securities (USA) LLC and Goldman Sachs & Co. are the joint bookrunners.

DNB Markets and Sumitomo are the co-managers.

The notes become callable after three years at par plus 75% of the coupon and feature a three-year 40% equity clawback and a 101% poison put.

The Houston-based oil and natural gas exploration and production company plans to use the proceeds to repay revolver debt and put cash on its balance sheet.

The issuing entities will be EP Energy LLC, a wholly owned subsidiary of EP Energy Corp., and Everest Acquisition Finance Inc., a wholly owned subsidiary of EP Energy LLC.

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