By Paul A. Harris
St. Louis, March 7 - Sandridge Energy Inc. priced $1 billion of seven-year senior unsecured term loans (B3/B) in two tranches on Wednesday, according to an informed source.
The Oklahoma City-based natural gas company priced a $650 million fixed-rate loan at par to yield 8 5/8%. The fixed-rate loan comes with a 75 basis point coupon toggle step-up for the first four years, should the issuer elect to make an in-kind, as opposed to cash, interest payment.
In addition Sandridge Energy priced a $350 million floating-rate loan at par to yield three-month Libor plus 362.5 bps.
Both tranches priced on top of price talk.
Banc of America Securities LLC, Credit Suisse, Goldman Sachs & Co., Lehman Brothers and Deutsche Bank Securities were the bookrunners.
The company has offered to exchange the loans for Rule 144A with registration rights senior unsecured notes one year after the loans close.
Proceeds will be used to repay the company's bridge loan and its senior secured credit facility as well as to prefund 2007 capital expenditures and for general corporate purposes.
| Issuer: | Sandridge Energy Inc.
|
| Amount: | $1 billion
|
| Maturity: | April 1, 2014
|
| Facility: | Senior unsecured term loans (company offers to exchange the loans into Rule 144A senior unsecured notes with registration rights one year after closing)
|
| Bookrunners: | Banc of America Securities LLC, Credit Suisse, Goldman Sachs & Co., Lehman Brothers, Deutsche Bank Securities
|
| Trade date: | March 7
|
| Expected settlement date: | March 20
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
|
|
| Fixed-rate tranche
|
| Amount: | $650 million
|
| Coupon: | 8 5/8%
|
| Price: | Par
|
| Yield: | 8 5/8%
|
| Toggle: | 75 bps for first four years
|
| Call features: | Callable on April 1, 2011 at 104.313, 102.156, par on and after April 1, 2013
|
| Price talk: | 8 5/8% area
|
|
|
| Floating-rate tranche
|
| Amount: | $350 million
|
| Coupon: | Three-month Libor plus 362.5 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 362.5 bps
|
| Call protection: | Callable after April 1, 2009 at 103, 102, 101
|
| Price talk: | Libor plus 362.5 bps area
|
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