New Issue: SM Energy sells upsized $350 million 6 5/8% eight-year notes at par

By Paul A. Harris

Portland, Ore., Jan. 31 - SM Energy Co. priced an upsized $350 million issue of eight-year senior notes (B1/BB/) at par to yield 6 5/8% on Monday, according to an informed source.

The yield printed at the tight end of the 6¾% area price talk.

Bank of America Merrill Lynch and Wells Fargo Securities were the joint bookrunners for the deal, which was upsized from $250 million.

Proceeds will be used to repay bank debt, to fund capital expenditures and for general corporate purposes.

SM Energy, formerly named St. Mary Land & Exploration Co., is a Denver-based independent energy company.

Issuer:	SM Energy Co.
Amount:	$350 million, upsized from $250 million
Maturity:	Feb. 15, 2019
Securities:	Senior notes
Bookrunners:	Bank of America Merrill Lynch, Wells Fargo Securities
Senior co-managers:	BBVA, Comerica Investments, J.P. Morgan Securities LLC
Co-managers:	Bank One South Coast, Capital One Southcoast, KeyBanc Capital Markets, Lloyds TSB, RBC Capital Markets, US Bancorp
Coupon:	6 5/8%
Price:	Par
Yield:	6 5/8%
Spread:	367 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Feb. 15, 2015, then callable at 103.313, 101.656, par on and after Feb. 15, 2017
Equity clawback:	35% at 106.625 until Feb. 15, 2014
Change-of-control put:	101%
Trade date:	Jan. 31
Settlement date:	Feb. 7
Ratings:	Moody's: B1
	Standard & Poor's: BB
Distribution:	Rule 144A with registration rights and Regulation S
Price talk:	6¾% area
Marketing:	Roadshow

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