PDC Energy (PDCE) Prices Larger 7.9M Share Common Stock, $175M Conv. Notes Offerings

September 9, 2016 6:59 AM EDT

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PDC Energy, Inc. (Nasdaq: PDCE) announced that it has priced concurrent underwritten public offerings of 7,900,000 shares of its common stock (the “common stock”) for total gross proceeds (before underwriters’ compensation and estimated expenses) of approximately $500 million and $175 million of its convertible senior notes due 2021 (the “notes”). J.P. Morgan, BofA Merrill Lynch, BMO Capital Markets and Wells Fargo Securities are serving as joint book-running managers for each of the common stock offering and the notes offering. The notes will be the Company’s senior unsecured obligations and will bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2017. The notes will be convertible at the option of holders in certain circumstances and during certain periods into cash, shares of common stock or a combination thereof at an initial conversion rate of 11.7113 shares per $1,000 principal amount of notes, which is equal to an initial conversion price of approximately $85.39 per share. The initial conversion price represents a premium of approximately 35% relative to the public offering price in the concurrent common stock offering. The notes will mature on September 15, 2021, unless earlier repurchased or converted in accordance with their terms prior to that date. The Company will not have the right to redeem the notes prior to maturity.

The Company has granted the underwriters in the common stock offering an option for 30 days to purchase up to an additional 1,185,000 shares of the Company’s common stock to cover over-allotments, if any. The Company has granted the underwriters in the notes offering an option for 30 days to purchase up to $25 million principal amount of additional notes to cover over-allotments, if any.

The common stock and the notes will be issued pursuant to separate prospectus supplements and an accompanying prospectus filed as part of an effective shelf registration statement filed with the Securities and Exchange Commission on Form S-3. The offerings are not contingent upon each other or upon the consummation of the Company’s previously announced acquisition (the “Acquisition”) of two privately held companies managed by Kimmeridge Energy Management Company that own an aggregate of approximately 57,000 net acres in Reeves and Culberson Counties, Texas.

PDC intends to use the net proceeds from the offerings to fund a portion of the cash consideration payable in the Acquisition, to pay related fees and expenses and for general corporate purposes. If the Acquisition is not completed for any reason, PDC intends to use the net proceeds from the offerings for general corporate purposes. The offerings are expected to close on or around September 14, 2016, subject to customary closing conditions.

A written prospectus and prospectus supplement relating to each offering may be obtained by sending a request to: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, email: prospectus-eq_fi@jpmchase.com.

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