By Paul A. Harris
Portland, Ore., Sept. 26 – Sitio Royalties Corp. priced an upsized $600 million issue of five-year senior notes (B3/B/BB-) at par to yield 7 7/8% in a Tuesday drive-by, according to market sources.
The issue size increased from $500 million.
The yield printed at the tight end of the 7 7/8% to 8% yield talk. Initial talk was 8¼% to 8½%.
There was $1.6 billion of demand for the notes at price talk, a trader said, adding that they had been spoken for in reverse inquiry nearly amounting to the original $500 million deal size.
Timing was accelerated. When the offering was announced early Tuesday it was slated as Wednesday business.
BofA Securities Inc. was the left active bookrunner. J.P. Morgan Securities LLC was a joint active bookrunner. Joint bookrunners were Capital One Securities Inc., CIBC World Markets Corp., Citigroup Global Markets Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., Truist Securities Inc., RBC Capital Markets LLC, Barclays, First Horizon, Goldman Sachs & Co. LLC and Texas Capital.
The Denver-based mineral and royalty company issued the notes via its subsidiaries Sitio Royalties Operating Partnership, LP and Sitio Finance Corp. and plans to use the proceeds to redeem its notes maturing it 2026 and pay down its revolving credit facility.
| Issuers: | Sitio Royalties Operating Partnership, LP and Sitio Finance Corp.
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| Amount: | $600 million, increased from $500 million
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| Issue: | Senior notes
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| Maturity: | Nov. 1, 2028
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| Left active bookrunner: | BofA Securities Inc.
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| Joint active bookrunner: | J.P. Morgan Securities LLC
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| Joint bookrunners: | Capital One Securities Inc., CIBC World Markets Corp., Citigroup Global Markets Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., Truist Securities Inc., RBC Capital Markets LLC, Barclays, First Horizon, Goldman Sachs & Co. LLC and Texas Capital
|
| Co-managers: | Comerica Securities Inc. and Tuohy
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| Coupon: | 7 7/8%
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| Price: | Par
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| Yield: | 7 7/8%
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| Spread: | 322 bps
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| First call: | Nov. 1, 2025 at 103.938
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| Trade date: | Sept. 26
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| Settlement date: | Oct. 3
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| Ratings: | Moody’s: B3
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| S&P: B
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| Fitch: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 7 7/8% to 8%
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| Marketing: | Drive-by (timing accelerated, deal initially announced as Wednesday business)
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