Vital Energy driving by with $575 million eight-year senior notes; initial talk low-8% area

By Paul A. Harris

Portland, Ore., March 14 – Vital Energy Inc. plans to price a $575 million offering of senior notes due 2032 (B2/B) in a Thursday drive-by, market sources say.

Initial guidance has the notes coming to yield in the low-8% area.

The Rule 144A and Regulation S for life eight-year notes become subject to an initial call after three years at par plus 50% of the coupon. They feature a 35% equity clawback at par plus the full coupon during the non-call period and have a 101 poison put.

BofA Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc. and PNC Capital Markets LLC are the joint active bookrunners.

Truist Securities Inc., Mizuho Securities USA Inc., KeyBanc Capital Markets Inc., U.S. Bancorp Investments Inc. and Capital One Securities Inc. are the joint bookrunners.

BOK Financial Securities Inc., Amegy and Comerica Securities Inc. are the co-managers.

The Tulsa, Okla.-based energy producer plans to use the proceeds plus corporate liquidity to fund a tender offer involving its 10 1/8% senior notes due 2028 and its 9¾% senior notes due 2030 and/or to repay debt under its senior secured credit facility.

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