Athlon talks $400 million eight-year notes to yield 7½%-7¾%

By Paul A. Harris

Portland, Ore., April 11 - Athlon Holdings LP and Athlon Finance Corp. talked their $400 million offering of eight-year senior notes (Caa1/CCC+) to yield 7½% to 7¾%, a syndicate source said on Thursday.

The deal is set to price on Friday.

Joint physical bookrunner BofA Merrill Lynch will bill and deliver for the Rule 144A and Regulation S deal. Wells Fargo Securities LLC is also a joint physical bookrunner.

Credit Agricole CIB, Credit Suisse Securities (USA) LLC, RBC Capital Markets and UBS Securities LLC are joint bookrunners.

AGS, Barclays, Citigroup Global Markets, Mitsubishi UFJ and Scotia Capital are the co-managers.

The notes become callable in three years at par plus 75% of the coupon.

The notes also feature a 110% call upon a third-party change of control until July 15, 2014.

Proceeds will be used to repay a portion of the company's outstanding debt, to fund a return of capital to its shareholders and for general partnership purposes.

Fort Worth, Texas-based Athlon, an entity formed by the former executives of Encore Acquisition Co. in August 2010, is an independent exploration and production company focused on the acquisition, development and exploitation of unconventional oil and liquids-rich natural gas reserves in the Permian Basin.

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