By Paul Deckelman
New York, Feb. 6 – EnVen Energy Corp. priced $325 million of five-year senior secured second-lien notes (Caa1/BB-) at par to yield 11%, high-yield market sources said Tuesday.
Price talk on the Houston-based independent oil and natural gas exploration and production company’s offering had envisioned a yield of 11% to 11¼%. That was wider than the initial guidance on the deal late last week, which had been in the 9½%-to-10% area.
The notes are to be issued by the company’s wholly owned Energy Ventures GoM LLC financing subsidiary, with that entity’s wholly owned subsidiary, EnVen Finance Corp., as co-issuer.
The Rule 144A/Regulation S transaction, which was formally announced by EnVen on Jan. 30, was brought to market via bookrunner J.P. Morgan Securities LLC.
The notes will be non-callable for the first two years after issue, except for a make-whole call at Treasuries plus 50 basis points.
EnVen said that the notes will initially be guaranteed on a senior secured second-priority basis by the company and its domestic subsidiaries that guarantee Energy Ventures GoM’s first-lien revolving credit facility. The notes and the related guarantees will be secured by second-priority liens on EnVen’s and the guarantors’ assets that secure all of the indebtedness under the revolver, subject to certain exceptions.
The company plans to use the proceeds from the issue to pay off the revolver and Energy Ventures GoM’s second-lien term loan, with any remaining proceeds to be used for general corporate purposes.
At the time it announced the notes offering, EnVen also said that in connection with that proposed transaction, it planned to amend the revolver to increase its borrowing base to $231.25 million and extend the maturity date to 2022. The company entered into its five-year revolver and term loan in the summer of 2013.
| Issuer: | EnVen Energy Corp. (via subsidiaries Energy Ventures GoM LLC and EnVen Finance Corp.)
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| Amount: | $325 million
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| Maturity: | Feb. 15, 2023
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| Security: | Senior secured second-lien notes
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| Bookrunner: | J.P. Morgan Securities LLC
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| Coupon: | 11%
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| Price: | Par
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| Yield: | 11%
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| Call protection: | Non-callable until Feb. 15, 2020, other than via make-whole call at Treasuries plus 50 bps
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| Pricing date: | Feb. 6
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| Settlement date: | Feb. 15
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| Ratings: | Moody’s: Caa1
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| S&P: BB-
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| Distribution: | Rule 144A/Regulation S
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| Price talk: | 11%-to-11¼% (versus initial 9½%-to10% area guidance)
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| Marketing: | Roadshow
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