St. Mary greenshoe fully exercised, lifting 3.5% convertibles to $287.5 million

By Jennifer Chiou

New York, April 4 - St. Mary Land & Exploration Co. announced that its $37.5 million over-allotment option was exercised in full, increasing its issue of 2.5% convertible senior notes to $287.5 million.

The company originally priced $250 million of the 20-year convertibles within talk with an initial conversion premium of 48% after the close on March 29.

As already reported, the notes were offered at par. They were talked at a coupon of 3.5% to 4% and an initial exchange premium of 47.5% to 52.5%.

Merrill Lynch and Wachovia Securities were the bookrunners of the Rule 144A offering.

The notes are non-callable for the first five years. They may be put in years five, 10 and 15.

The notes are contingently convertible into shares of St. Mary common stock at a conversion price of $54.42 per share.

There is a contingent conversion trigger at 130% of the conversion price and contingent payment at 120% of the principal.

The notes have dividend and takeover protection. There is a net-share settlement feature.

St. Mary, a Denver-based oil and gas exploration company, said the proceeds of the deal will be used to repay outstanding revolving debt.

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