New Issue: MEG sells upsized $800 million 10.5-year notes at par to yield 6 3/8%

By Paul A. Harris

Portland, Ore., July 16 - MEG Energy Corp. priced an upsized $800 million issue of 10.5-year senior notes (B1/BB/) at par to yield 6 3/8% on Monday, according to a syndicate source.

The yield printed at the tight end of price talk, which had been set in the 6½% area.

Barclays Capital Inc., BMO Capital Markets Corp. and Credit Suisse Securities (USA) LLC were the joint bookrunners for the quick-to-market deal, which was upsized from $700 million.

The Calgary, Alta.-based oil sands development company plans to use the proceeds for general corporate purposes, including funding capital investments.

Issuer:	MEG Energy Corp.
Amount:	$800 million, increased from $700 million
Maturity:	Jan. 30, 2023
Securities:	Senior notes
Bookrunners:	Barclays Capital Inc., BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC
Co-managers:	RBC Capital Markets, LLC, CIBC World Markets Corp., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC
Coupon:	6 3/8%
Price:	Par
Yield:	6 3/8%
Spread:	491 bps
Call features:	Make-whole call at Treasuries plus 50 bps until July 30, 2017, then callable at 103.188, 102.125, 101.063, par on and after July 30, 2020
Equity clawback:	35% at 106.375 until July 30, 2015
Investor put:	101% triggered by change of control and a rating decline
Trade date:	July 16
Settlement date:	July 19
Ratings:	Moody's: B1
	Standard & Poor's: BB
Distribution:	Rule 144A and Regulation S for life
Price talk:	6½% area
Marketing:	Quick to market

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