New Issue: KCS Energy upsized $175 million eight-year notes yield 7 1/8%

By Paul A. Harris

St. Louis, March 25 - KCS Energy Inc. priced an upsized issue of $175 million of eight-year senior notes (B3/B-) Thursday at par to yield 7 1/8%, a syndicate source said.

Price talk was 7¼% to 7½%.

Credit Suisse First Boston ran the books on the Rule 144A/Regulation S issue. The co-managers were Merrill Lynch & Co., Jefferies & Co., Harris Nesbitt, Banc One Capital Markets and BNP Paribas.

Proceeds will be used to repay bank debt and redeem existing bonds.

The issuer is a Houston-based independent oil and gas exploration and production company.

Issuer:	KCS Energy Inc.
Amount:	$175 million, increased from $150 million
Maturity:	April 1, 2012
Security description:	Senior notes
Bookrunner:	Credit Suisse First Boston
Co-managers:	Merrill Lynch & Co., Jefferies & Co., Harris Nesbitt, Banc One Capital Markets, BNP Paribas
Coupon:	7 1/8%
Price:	Par
Yield:	7 1/8%
Spread:	370 basis points
Call features:	Callable after April 1, 2008 at 103.563, 101.781, par on and after April 1, 2010
Equity clawback:	Until April 1, 2007 at 107.125 for up to 35%
Pricing date:	March 25
Settlement date:	April 1
Ratings:	Moody's: B3
	Standard & Poor's: B-
Price talk:	7¼%-7½%

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