Penn Virginia Corp., a Radnor natural gas producer, is making its debut in the fixed-income market, agreeing to the sale of $300 million in seven-year senior notes with an interest rate of 10.375 percent and a yield of 11 percent, the company said today.
The sale is expected to close Monday.
The anticipated proceeds of $282 million will be used to pay most of the $325 million it has outstanding on a revolving credit facility.
The interest rate on the credit line is lower, at 4 percent to 5 percent now, but the terms of the line can change twice a year, James W. Dean, Penn Virginia's vice president of investor relations said.
"You pay extra for the longer term," Dean said.
Last month, Penn Virginia raised $64.9 million by selling shares. - Harold Brubaker