Cobre del Mayo to exchange $125.23 million PIK toggle notes due 2021

By Rebecca Melvin

Concord, N.H., April 12 – Cobre del Mayo, SA de CV is offering to exchange its outstanding $125,228,986 principal amount of senior secured PIK toggle notes due 2021 (ISIN: XS1354863612 and XS1354862564) for a combination of senior secured notes due 2026 and senior secured PIK toggle notes due 2030, according to a company release.

In connection with the offer, the company is soliciting consents to amend provisions of the 2021 notes to eliminate most of the restrictive covenants. Holders must consent to the indenture changes to participate in the exchange offer.

Holders that validly exchange their notes prior to 5 p.m. ET April 23, the early tender deadline, will be eligible to receive $1.043.75 principal amount of new notes per $1,000 principal amount of existing notes.

Those who tender after the early deadline but before the expiration time at 11:59 p.m. ET on May 7 will be eligible to receive $980.00 of new notes per $1,000 of existing notes.

Tendered notes may be validly withdrawn and consents revoked at any time prior to 11:59 p.m. ET on May 7.

Holders may elect to receive series A secured notes, series B secured notes or a combination of the two as the exchange consideration.

The new notes will be guaranteed by direct and indirect subsidiaries of parent company Frontera Copper Corp., SAPI de CV but will not be guaranteed by Frontera.

The purpose of the exchange is to better align Cobre del Mayo’s debt service requirements with its anticipated cash generation capabilities, the company stated in the release.

A recent increase in copper prices and its decision to restart mining operations in January makes the company confident it ill be able to service its debt after the exchange offer.

BCP Securities, LLC is acting as dealer manager and solicitation agent for the exchange offer and the consent solicitation. Ipreo LLC is acting as exchange agent and information agent.

The issuer is a mining company based in Mexico City.

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