By Paul A. Harris
St. Louis, Mo., March 13 - Magnum Hunter Resources, Inc. upsized its offering of senior notes due March 15, 2012 (B2/B) to $300 million from $250 million and priced the deal Wednesday at par to yield 9.60%, according to syndicate sources.
Official price talk was 9.625%-9.875%, according to a syndicate source.
Deutsche Banc Alex. Brown was bookrunner. Lehman Brothers was co-lead manager and co-managers were CIBC World Markets, BNP Paribas, Raymond James, Monness Crespi, RBC, San Jacinto, SWS Securities, Frost, Ryan Beck and Wescap.
Proceeds will be used to fund the acquisition of Prize Energy.
According to a market source the offering upsized on strong investor demand, as it benefited from the current positive outlook for oil and gas industry fundamentals and commodity prices. The execution was also enhanced by an announcement from Standard & Poor's that, upon completion of Magnum's acquisition of Prize Energy, the agency expects to raise its rating on Magnum's senior unsecured debt (including the new notes) to B+.
| Issuer: | Magnum Hunter Resources, Inc.
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| Amount: | $300 million (increased from $250 million)
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| Maturity: | March 15, 2012
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| Bookrunner: | Deutsche Banc Alex. Brown
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| Coupon: | 9.60%
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| Price: | Par
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| Yield: | 9.60%
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| Spread: | 432 basis points
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| Call features: | Callable on March 15, 2007 at 104.8, 103.2, 101.6, par on March 15, 2010 and thereafter
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| Equity clawback: | Until March 15, 2005 for 35% at 109.60
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| Settlement date: | March 15, 2002 (T+2) flat
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| Ratings: | Moody's: B2
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| Standard & Poor's: B
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| Rule 144A CUSIP: | 55972FAB0
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