Cimarex Buys Back Senior Notes, With More Debt (XEC)

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Cimarex Energy Company is one of those mid-cap energy stocks that is well-liked by institutional investors. Nearly 90% of the company’s stock is held by institutional investors. In good times, that’s good. In bad times, those investors might need the cash themselves. That appears to be what’s happened today.

Cimarex was forced to offer to redeem $125 million of floating rateconvertible senior notes that were not due until 2023. As of close ofbusiness yesterday, $105.6 million of the notes have been tendered.

The company will borrow the money to pay for the buyback with fundsfrom its bank credit facility. The company has a $1 billion facility ofwhich it has permission to borrow $500 million. Now that figure is $375million or so.

Cimarex shares are up more 2.5% in mid-day trading. The stock is down about 67% from its 52-week high.

Paul Ausick
December 16, 2008