By Abigail W. Adams
Portland, Me., March 6 – Kosmos Energy Ltd. priced an upsized $350 million of six-year convertible notes after the market close on Tuesday at par with a coupon of 3.125% and an initial conversion premium of 30%, according to a company news release.
Pricing came toward the cheap end of talk for a coupon of 2.875% to 3.375% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
BofA Securities Inc. and Barclays were bookrunners for the Rule 144A deal, which carries an upsized greenshoe of $50 million.
The initial size of the offering was $300 million with a greenshoe of $45 million.
The notes are non-callable until March 22, 2027 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
In connection with the offering, the company entered into capped call transactions with a cap price of $10.80, which represents a 100% premium over the last reported sales price of stock.
Net proceeds are expected to be $340.4 million or will be $389 million if the greenshoe is exercised in full.
Approximately $43.6 million of net proceeds will be used to cover the cost of the call spread with the remaining amount used to repay outstanding debt under its commercial debt facility.
Kosmos Energy is a Dallas-based deep-water oil and gas exploration company.
| Issuer: | Kosmos Energy Ltd.
|
| Amount: | $350 million
|
| Greenshoe: | $50 million
|
| Issue: | Convertible notes offering
|
| Maturity: | March 15, 2030
|
| Bookrunners: | BofA Securities Inc. and Barclays
|
| Coupon: | 3.125%
|
| Price: | Par
|
| Yield: | 3.125%
|
| Conversion premium: | 30%
|
| Conversion price: | $7.02
|
| Conversion rate: | 142.4501
|
| Call options: | Non-callable until March 22, 2027 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 5
|
| Settlement date: | March 8
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2.875% to 3.375% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: KOS
|
| Stock price: | $5.40 at market close March 5
|
| Market capitalization: | $2.55 billion
|
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