Magnum Hunter starts roadshow Monday for $250 million 10-year notes

By Paul A. Harris

St. Louis, Mo., Feb. 28 - Magnum Hunter Resources, Inc. will begin the roadshow Monday for an offering of $250 million of 10-year senior notes via Deutsche Banc Alex. Brown, according to a syndicate source.

The new 10-year notes are non-callable for five years, according to market sources who added that the deal is expected to price during the week of March 11.

Proceeds will be used as part of the financing of Magnum's acquisition of Prize Energy Corp., according to Michael McInerney, vice president of corporate development and investor relations at the company.

"Principally, we're acquiring Prize Energy," McInerney said. "We made a news announcement on Dec. 18 that we had signed a definitive agreement. We filed with the SEC on Jan. 15, and it was effective on Feb. 8.

"We have proxy material in the hands of shareholders of both companies, for a vote by March 13," he added, noting that the merger could become effective by March 15.

"Prize Energy has approximately $250 million of bank debt," McInerney said. "What we're doing (with the high yield deal) is replacing that bank debt with notes."

McInerney also said that Magnum has an outstanding $129.5 million issue of bonds due 2007 that priced in 1997, also underwritten by Deutsche Banc Alex. Brown. These notes are callable in 2002.

Magnum Hunter is an independent exploration and development company headquartered in Irving, Texas.

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