Gibson Energy plans to sell $350 million dual-currency notes Monday

By Paul A. Harris

Portland, Ore., June 9 – Gibson Energy Inc. plans to price $350 million equivalent of senior notes (expected ratings Ba3/BB) in a quick-to-market Monday transaction, trailing a late-morning conference call with investors, according to a syndicate source.

The deal includes an add-on to the company’s dollar-denominated 6¾% senior notes due July 15, 2021. Those notes become callable on July 15, 2016 at 105.063. The original $500 million issue priced at 98.476 to yield 7% on June 25, 2013. The new Rule 144A and Regulation S for life add-on notes will be immediately fungible with the original notes.

The transaction also includes new Canadian dollar-denominated senior notes due 2022. The Canadian dollar-denominated notes, which are coming as a Rule 144A-eligible private placement, have three years of call protection.

Tranche sizes remain to be determined.

Global coordinator RBC Capital Markets will bill and deliver. BMO Securities is also a global coordinator. J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are joint bookrunners.

Scotia Capital, CIBC World Markets, TD Securities, Credit Suisse Securities (USA) LLC and NBF are co-managers. Nomura is a co-manager on the U.S. dollar-denominated tranche only.

The Calgary, Alta.-based independent midstream operator plans to use the proceeds to fully repay its revolving credit facility, excluding its letters of credit, as well as to fund capital expenditures and for general corporate purposes.

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