By Paul A. Harris
Portland, Ore., April 17 - Sterling Resources Ltd. has priced a $225 million issue of 9% six-year senior secured notes at par, according to an informed source.
The notes, which are subject to a program of amortization commencing after 18 months, have an all-in yield of 10.4%.
Pareto Securities was the manager and bookrunner.
Of the proceeds, $140 million will be used to prepay the company's entire senior secured credit facility. Proceeds will also go toward funding ongoing development costs of the Breagh field, including development of the eastern portion of the field (phase 2), as well as to prefund the first interest payment on the notes, due in October 2013, and for general corporate purposes.
"Following on from our equity raise completed earlier this year, the proceeds from the bond and the Cladhan farm-down leaves Sterling as a soundly financed company," Mike Azancot, Sterling's president and chief executive officer, commented in a Wednesday press release.
"The bond enables us to fully refinance our senior secured credit facility and provides sufficient additional capital to fund future expenditures for Breagh. In addition, the bond provides the company with accelerated access to Breagh cash flow, allowing us to continue our strategy in a financially disciplined manner.
"We now look forward to achieving first production on Breagh during August 2013, which will be a further transformational milestone for the company."
Sterling Resources is an oil and gas company based in Calgary, Alta.
| Issuer: | Sterling Resources (UK) Ltd. (Sterling Resources Ltd.)
|
| Amount: | $225 million
|
| Maturity: | April 30, 2019
|
| Securities: | Senior secured notes
|
| Manager and bookrunner: | Pareto Securities
|
| Coupon: | 9%
|
| Price: | Par
|
| Yield: | 10.4%
|
| Call: | Callable at 105 for the first three years
|
| Amortization: | After 18 months 10% of the bonds amortize at every six months at 105
|
| Settlement date: | April 30
|
| Listing application: | Oslo Stock Exchange or the Nordic ABM
|
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