Secondary Offerings Keep Mounting (CAST, RGNC, SD, TRMK, HGSI)

This morning we have another flurry of secondary offerings that are hitting the market.  Today’s tally comes to what looks like more than $500 million being absorbed by the public equity markets.  These offerings came from ChinaCast Education Corporation (NASDAQ: CAST), Regency Energy Partners LP (NASDAQ: RGNC), SandRidge Energy, Inc. (NYSE: SD), and Trustmark Corporation (NASDAQ: TRMK).  We are also looking for the big $300+ million offering to be priced late today or tonight from Human Genome Sciences, Inc. (NASDAQ: HGSI).

We have compiled deal details, use of funds, the gross amounts of each offering, a list of underwriters, and share price reactions for each deal.

ChinaCast Education Corporation (NASDAQ: CAST) priced a public secondary offering of 5,930,000 shares of common stock at $6.85 per share.  The net proceeds from this offering are earmarked for working capital, future acquisitions and general corporate purposes.  Shares are actually up 2% at $7.45 on the pricing after a $7.29 close yesterday.  This was under a shelf filing from September and net proceeds should be be approximately $38.5 million. Roth Capital Partners is the sole book-runner and it has an option to purchase up to an additional 889,500 shares to cover over-allotments.

Regency Energy Partners LP (NASDAQ: RGNC) boosted its offering.  The company priced “an upsized public offering” of 10,500,000 common units (LP interests) at $19.12 per common unit.  This will be close to $200 million in gross proceeds and the company intends to use the proceeds to repay outstanding debt under its revolving credit facility.  UBS, BofA Merrill Lynch, J.P. Morgan, Morgan Stanley, and Wells Fargo Securities are joint book-running managers for the offering.  Regency granted the underwriters a 30-day option to purchase up to an additional 1,575,000 common units. Regency  The offering is scheduled to close on December 7, 2009.  Regency shares are down close to 5% at $18.97 after a $19.96 close and the entire day’s trading volume has already been hit even before the opening bell at 9:30 AM.

SandRidge Energy, Inc. (NYSE: SD) priced its previously announced public secondary offering of 24,000,000 shares of common stock at $8.85 per share.  Of the offering, 2 million shares are being sold by its Chairman Tom Ward. Funds from this offering will be used to fund a portion of the purchase price of its previously announced acquisition of oil and gas properties in the Permian Basin region from Forest Oil Corporation, or they will be for general corporate purposes if the deal is not closed. Barclays, BofA Merrill Lynch, and RBC Capital Markets are the joint book-running managers and the company granted the underwriters of the offering a 30-day option to purchase up to 3,600,000 additional shares of common stock. Shares are now up 2% at $9.17 after a $8.99 close yesterday and after shares had lost more than 5% in the last three trading sessions.

Trustmark Corporation (NASDAQ: TRMK) priced its public secondary offering of 5,405,406 shares of common stock at $18.50 per share. The gross proceeds are roughly $100 million, but this is being used to get Uncle Sam out of the bank.   Trustmark said that it intends to notify the U.S. Treasury of its intent to redeem all 215,000 shares of its outstanding Fixed Rate Cumulative Perpetual Preferred Stock.  UBS and J.P. Morgan are the joint book-running managers, while Keefe Bruyette & Woods and Sandler O’Neill & Partners are co-managers for the offering; Trustmark has also granted the underwriters a 30-day over-allotment option to purchase up to 810,810 additional shares of common stock.  Trustmark shares are up 1% at $19.20 after a $19.00 close yesterday.

Human Genome Sciences, Inc. (NASDAQ: HGSI) was already down yesterday after it filed to sell up to 12.5 million shares on Monday evening.  That $300+ million offering is expected to price late today or tonight, and this will add about 7% of added shares to the free float of the stock. Goldman Sachs and Citigroup were listed as the joint book-runners.  Shares were off yesterday and are up 0.3% at $27.12 right at the open.

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JON C. OGG
DECEMBER 2, 2009