Harvest Energy greenshoe lifts convertibles, trust units to C$638.4 million

By Angela McDaniels

Seattle, Nov. 22 - Harvest Energy Trust said the underwriters of its offering of 7.25% convertible unsecured subordinated debentures due 2013 and trust units exercised their over-allotment option in full, raising the proceeds to C$638.4 million.

The trust originally priced C$330 million of the debentures and C$225 million of the trust units, or 8.26 million units at C$27.25 each.

With the greenshoe, the total principal amount of debentures sold is C$379.5 million and the total number of units sold is 9.5 million, or C$258.9 million.

The debentures are convertible into trust units at a conversion price of C$32.20 per unit.

Purchasers of the trust units will receive a C$0.38 distribution per unit on Dec. 15.

CIBC World Markets Inc. and TD Securities Inc. co-led the underwriting syndicate, which also included RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., HSBC Securities (Canada) Inc., National Bank Financial Inc., FirstEnergy Capital Corp and Canaccord Capital Corp.

The underwriters were granted a greenshoe for C$49.5 million principal amount of debentures and 1.24 million trust units.

The deal was announced on Oct. 25 and settled on Wednesday. Harvest Energy originally planned to price C$400 million of the debentures with a 6.3% coupon and 3.15 million trust units at C$31.75 each. The trust announced the revised terms on Nov. 9.

Net proceeds of C$610.2 million were used to fully repay Harvest Energy's C$450 million unsecured senior bridge facility, to repay C$60 million of its C$350 million senior secured bridge facility and reduce the drawn portion of its three-year extendible revolving credit facility by C$100 million.

The trust's lender agreed to amend the mandatory repayment terms of the senior secured bridge facility to allow Harvest Energy to retain C$100 million of the proceeds for general corporate purposes.

Calgary, Alta.-based Harvest Energy is an energy trust that acquires and manages oil and gas properties.

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