EXCO Resources (XCO) today announced preliminary results of its rights offering. The transaction was, without any doubt, a success: the rate of shareholder participation outside of the backstop agreements with core shareholders was reasonably high, in spite of the moderate discount that the $5 strike price represented to the pre-announcement price. Of the ~54.5 million total shares of common stock expected to be issued, EXCO believes that ~28.2 million shares will be issued in the rights offering. The subscription results seems to indicate strong market appetite for gas-levered "stories" and EXCO's story in particular.
As a result of the transaction, the company raised ~$273 million of critically needed equity. The capital raise obviously has its price: the...
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