Sanchez Energy talks $350 million eight-year notes to yield 7½%-7¾%; pricing Monday

By Paul A. Harris and Aleesia Forni

Virginia Beach, Va., June 10 - Sanchez Energy Group set yield talk for its proposed $350 million issue of eight-year senior notes (Caa1/CCC+) at 7½% to 7¾%, a market source said.

Books close at noon ET on Monday, and pricing is expected thereafter.

RBC Capital Markets LLC is the left bookrunner.

Credit Suisse Securities (USA) LLC is the joint bookrunner.

Capital One is the senior co-manager, and BB&T Capital Markets, BBVA Securities Inc., Iberia, ING Financial Markets LLC, Mitsubishi UFJ, SG CIB and SunTrust Robinson Humphrey Inc. are the co-managers.

The Rule 144A and Regulation S with registration rights notes will be non-callable for four years and feature a three-year 35% equity clawback and a 101% poison put.

Proceeds will be used to repay the company's first-lien credit facility incurred to fund a portion of the Cotulla acquisition, to repay its second-lien credit facility in full and to fund general corporate purposes including the pre-funding of capital expenditures.

Sanchez Energy is a Houston-based oil and gas exploration and development company.

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