By Kenneth Lim
Boston, April 13 - Penn West Energy Trust priced a C$250 million private placement of senior unsecured notes at an average coupon of about 8.9%, according to a press release.
Some details of the placement were previously reported by Prospect News.
The notes have terms ranging from five to 10 years.
The notes were priced between 600 basis points and 650 bps over Treasuries, Penn West manager of investor relations Jason Fleury told Prospect News.
Banc of America Securities LLC and Citigroup Global Markets Inc. were the lead bookrunners on the private placement in the United States. BNP Paribas Securities Corp., HSBC and Societe Generale were bookrunners overseas.
Closing is expected on May 5.
Proceeds will be used to partially repay the company's outstanding balance under existing syndicated bank facilities.
Penn West is a Calgary, Alta.-based oil and gas investment trust.
The company had originally gone to the market looking for just C$100 million, Fleury said.
"We have seen a number of these deals in the marketplace," he said. "The pricing has changed over the last year, credit risk is greater, but what I would say on this front is we were generally pleased with how the process went."
"It affirms for us the fact that the market still views us as a strong company," he added, noting that the pricing was similar to other recent deals. "Internally you can always think, hey, the company is doing well, but once in a while it's nice to go out and get that from other people."
The company has received interest from a number of investors in the United States, Canada, the United Kingdom and Europe, he added.
"The landscape in terms of the people who are looking at this has changed a bit from last year," Fleury said. "Obviously we didn't meet AIG this year. But what I would say is we had some very positive responses from the people overseas. What it ultimately does say about the company and the market is there are good companies out there and good companies are still able to raise capital."
Fleury also noted a greater variety of sentiment from prospective investors.
"The response this year versus last year, last year it was fairly consistent among the different groups we spoke to," he said. "But last year we were speaking when oil was $100 a barrel. The fact that we went out in a difficult environment and overall still had a positive response is very encouraging for us."
"The mood among people we spoke to was much more varied this year," he continued. "There were some clear bulls and some clear bears among the groups that we met with...The only pessimism came from the folks who thought the price of oil was going to go to $25 or something like that. Those who thought $50 was a sustainable price, $60 to $80 was possible in the next few years, those guys are a little more robust on the deal. The spectrum on the opinions, the mood, was much broader than last year."
| Issuer: | Penn West Energy Trust
|
| Issue: | Senior unsecured notes
|
| Amount: | C$250 million
|
| Maturity: | Five to 10 years
|
| Coupon: | 8.9%
|
| Spread: | 600-650 bps over Treasuries
|
| Bookrunners: | Banc of America Securities LLC, Citigroup Global Markets Inc., BNP Paribas Securities Corp., HSBC, Societe Generale
|
| Distribution: | Private placement
|
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