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Published on 10/20/2015 in the Prospect News Liability Management Daily and Prospect News Preferred Stock Daily.

Black Stone aims to launch tender offer for series A preferred units

By Marisa Wong

Morgantown, W.Va., Oct. 20 – Black Stone Minerals, LP said it plans to conduct a cash tender offer to purchase up to 100% of the 117,963 outstanding series A preferred units from its preferred unitholders.

The company will offer to purchase the preferreds at par of $1,000 per unit, plus accrued yield.

The partnership intends to fund the tender offer with cash on hand and funds available under its revolving credit facility.

Black Stone Minerals expects to begin the proposed tender offer during the week of Nov. 2.

Thomas L. Carter Jr., chairman, president and chief executive officer of Black Stone, said in a press release, “The proposed tender offer reflects our continued focus on maximizing the cash available for distribution to our common and subordinated unitholders.

“We expect that financing a tender offer for the preferred units, which yield 10%, with borrowings under our revolving credit facility at a cost of approximately 2% would result in significant cash savings through the end of 2018 if all the preferred units were to be tendered.

“In addition, any tender of preferred units avoids the corresponding dilution to existing common and subordinated unitholders that would otherwise occur with the mandatory conversion over time of those preferred units into common and subordinated units.

“Pending the outcome of our fall borrowing base redetermination, we have approximately $570 million of borrowing capacity currently available to us under our revolving credit facility, and we believe that the proposed tender will be an efficient use of our capital without limiting our ability to pursue accretive acquisitions,” Carter said.

The tender offer will not be conditioned upon any minimum number of units being tendered.

Based in Houston, Black Stone owns oil and natural gas mineral interests in the United States.


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