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Callon Sells $100 Million of Bonds

The high-yielding notes come with a stock warrant.
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Callon Petroleum

(CPE) - Get Callon Petroleum Company Report

sold $100 million of junk bonds in a private placement and will use the money to redeem two series of higher-yielding notes coming due next year.

The new 9.75% senior secured notes due 2011 were sold with a detachable warrant to buy 1.5 million common shares at an exercise price of $10. That's 89 cents less than the shares currently cost.

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"This note issuance provides us not only with a financing solution for our 2004 maturities but also offers a tremendous amount of flexibility in refinancing our other indebtedness," Callon said.

The company said the proceeds along with 2004 cash flow will allow it to fund its 2004 capital expenditure budget, refinance its 2004 maturities and reduce other outstanding debt.