Centennial Resource talks $150 million seven-year exchangeables to yield 2.75%-3.25%, up 30%-35%

By Abigail W. Adams

Portland, Me., March 16 – Centennial Resource Development Inc. plans to price $150 million of seven-year exchangeable notes after the market close on Tuesday with price talk for a coupon of 2.75% to 3.25% and an initial conversion premium of 30% to 35%, according to a market source.

The notes will be issued by Centennial Resource Production LLC and exchangeable for Centennial Resource Development shares.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Jefferies LLC are joint bookrunners for the registered offering, which carries a greenshoe of $22.5 million.

The notes are non-callable until April 7, 2025 and then subject to a 130% hurdle.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to redeem in full its outstanding 8% second-lien senior secured notes due 2025 and to repay outstanding borrowings under its credit facility.

Centennial Resource is a Denver-based oil and natural gas company.

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