New Issue: Quicksilver Resources sells downsized $525 million notes in two parts

By Paul A. Harris

Portland, Ore., June 12 - Quicksilver Resources Inc. priced a downsized and restricted $525 million face amount of high-yield notes in two tranches on Wednesday, according to a syndicate source.

In a secured tranche, the company priced $200 million of six-year second-lien senior secured floating-rate notes (B2/CCC+) at 97 with a coupon of Libor plus 575 basis points. The coupon factors in a 1.25% Libor floor.

The spread, reoffer price and Libor floor came on top of talk.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were the global coordinators and joint bookrunners. Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Wells Fargo Securities LLC and BofA Merrill Lynch were also joint bookrunners.

In an unsecured tranche, Quicksilver Resources prices a downsized $325 million of 11% eight-year senior notes (Caa2/CCC) at 94.928 to yield 12%.

The yield printed 12.5 bps beyond the wide end of yield talk set in the 11¾% area. The reoffer price came cheap to discount talk of 3 to 4 points.

The tranche was downsized from $675 million.

Credit Suisse, Citigroup and Deutsche Bank were global coordinators and joint bookrunners. JPMorgan, TD Securities (USA) LLC and UBS were also joint bookrunners.

The Fort Worth, Texas-based owner and acquirer of oil and gas properties decreased the overall deal size from $875 million.

Proceeds and cash on hand will be used to repurchase any and all of the 8¼% senior notes due 2015, the 11¾% senior notes due 2016 validly tendered in previously announced tender offers, and repurchase, redeem or discharge the notes outstanding after the tenders.

Issuer:	Quicksilver Resources Inc.
Amount:	$525 million, decreased from $875 million
Trade date:	June 12
Settlement date:	June 21
Distribution:	Rule 144A and Regulation S
Marketing:	Roadshow
Secured notes
Face amount:	$200 million
Proceeds:	$194 million
Maturity:	June 1, 2019
Securities:	Second-lien senior secured floating-rate notes
Coupon:	Three-month Libor plus 575 bps
Libor floor:	1.25%
Price:	97
First call:	Callable after one year at 102
Ratings:	Moody's: B2
	Standard & Poor's: CCC+
Price talk:	Three-month Libor plus 575 bps at 97 with a 1.25% Libor floor
Global coordinators/bookrunners:	Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC
Joint bookrunners:	Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Wells Fargo Securities LLC, BofA Merrill Lynch
Co-managers:	UBS Securities LLC, TD Securities (USA) LLC, Bank of Nova Scotia, CIBC World Markets Corp., RBS Securities Inc.
Unsecured notes
Face amount:	$325 million (decreased from $675 million)
Proceeds:	$308.5 million
Maturity:	July 1, 2021
Securities:	Senior notes
Coupon:	11%
Price:	94.928
Yield:	12%
Spread:	1,008 bps
Call features:	Make-whole call at Treasuries plus 50 bps until July 1, 2019, then callable at 102, par on and after July 1, 2020
Equity clawback:	35% at 111 until July 1, 2016
Ratings:	Moody's: Caa2
	Standard & Poor's: CCC
Price talk:	11¾% area, including 3 to 4 points of OID
Global coordinators/bookrunners:	Credit Suisse, Citigroup, Deutsche Bank
Joint bookrunners:	JPMorgan, TD Securities (USA) LLC, UBS
Co-managers:	Wells Fargo, BofA Merrill Lynch, KeyBanc Capital Markets Inc., BB&T Capital Markets, BBVA Securities Inc., Comerica Securities Inc., Credit Agricole CIB, Goldman Sachs & Co., SMBC Nikko Capital Markets Ltd., U.S. Bancorp Investments Inc.

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