Each one in plain English, with the numbers worked through for a shareholder.
2 Oct 2014debt financing● NeutralMajor
The $500 million 6.625% senior notes due October 1, 2022 were issued on September 26, 2014, guaranteed by subsidiary RSP Permian, L.L.C., with net proceeds of about $488.6 million. About $342.5 million repays credit facility borrowings and the rest is for general corporate purposes. The notes rank behind the secured credit facility and carry restrictions on debt, dividends, asset sales and other actions; RSP also agreed to register exchange notes with the SEC within 360 days.
On September 23, 2014 RSP agreed to sell $500 million of 6.625% senior unsecured notes due 2022 at par to initial purchasers led by Barclays and RBC, for net proceeds of about $488.6 million. The press release says this was $50 million larger than first announced and that proceeds go to repay credit facility borrowings, with the balance for general corporate purposes. This is the senior notes issue anticipated in the August facility amendment.
A third amendment to the Comerica credit facility, dated September 12, 2014, lets RSP's operating subsidiary pay its parent amounts needed to service unsecured notes and guarantee those notes, provided no default exists. This is the follow-through on the August permission to issue senior notes and sets up the note sale that follows.
On August 29, 2014 RSP closed the Glasscock County acquisition announced in July, paying about $257 million in cash (subject to post-closing adjustments), funded from cash on hand and credit facility borrowings. The same day the credit facility was amended: borrowing base raised from $375 million to $500 million, total lender commitments from $500 million to $1 billion, maturity extended to August 29, 2019, and the company permitted to issue senior notes.
RSP and selling stockholders sold 11,500,000 shares at $25.65 each (including a fully exercised 1.5 million-share extra allotment), closing August 12, 2014. RSP itself sold 4,791,667 shares for about $117.8 million net, to repay credit facility debt, while selling stockholders sold 6,708,333 shares and RSP got none of that money. The new shares add to the share count, and this is the equity funding flagged in the July acquisition announcement.
RSP's subsidiary agreed on July 22, 2014 to buy producing properties and undeveloped acreage in Glasscock County, Texas, from four sellers (Adventure Exploration Partners II, Alpine Oil, JM Cox Resources and D.R.E. Interests) for $249.9 million in cash, with closing expected August 29, 2014. The press release describes a larger approximate $259 million total across separate transactions, to be funded by credit facility borrowings and possible equity sales, and builds on the Glasscock acreage RSP acquired in the first quarter of 2014.
RSP's operating subsidiary and its lenders, led by Comerica Bank, raised the borrowing base on the company's credit facility from $300 million to $375 million after the regular twice-yearly review. This gives the company more borrowing capacity under its existing bank facility; the filing does not say how much was drawn.
