New Issue: Key Energy prices $200 million tap of 6¾% notes due 2021 at 102.5 to yield 6.301%

By Paul A. Harris

Portland, Ore., March 5 - Key Energy Services, Inc. priced a $200 million add-on to its 6¾% senior notes due March 1, 2021 (B1/BB+/) at 102.5 to yield 6.301% on Monday, according to a syndicate source.

The reoffer price came on top of the price talk.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets and Wells Fargo Securities LLC were the joint bookrunners for the quick-to-market add-on.

The Houston-based well servicing contractor plans to use the proceeds to repay debt under its senior secured revolver.

The original $475 million issue priced at par in March 2011.

Issuer:	Key Energy Services, Inc.
Amount:	$200 million
Proceeds:	$205 million
Maturity:	March 1, 2021
Security description:	Add-on to 6¾% senior notes due March 1, 2021
Bookrunners:	Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets, Wells Fargo Securities LLC
Coupon:	6¾%
Price:	102.5
Yield:	6.301%
Spread:	453 bps
Call features:	Make-whole call at Treasuries plus 50 bps until March 1, 2016, then callable at 103.375, 102.25, 101.125, par on and after March 1, 2019
Equity clawback:	35% at 106.75 until March 1, 2014
Change-of-control put:	101%
Trade date:	March 5
Settlement date:	March 8 with accrued interest
Existing ratings:	Moody's: B1
	Standard & Poor's: BB-
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	102.5 area
Marketing:	Quick to market
Original issue:	$475 million priced at par in March 2011
Total issue size:	$675 million

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