Cobre del Mayo gives initial results of PIK toggle notes exchange, extends early consideration

By Rebecca Melvin

Concord, N.H., April 26 – Cobre del Mayo, SA de CV has accepted for exchange all of the senior secured PIK toggle notes due 2021 (ISIN: XS1354863612 and XS1354862564) that were tendered by the early deadline at 5 p.m. ET on April 23, or $119,533,779 principal amount, according to a company release.

The amount represents 95.35% of the of the $125,228,986 outstanding principal amount of notes.

The notes are being exchanged for senior secured notes due 2026, senior secured PIK toggle notes due 2030 or a combination of the 2026 and 2030 notes.

In connection with the offer, the company obtained consents representing about 95.45% of the existing notes to amend provisions of the 2021 notes to eliminate most of the restrictive covenants. The amount is more than the required amount; therefore, a supplemental indenture governing the notes will be executed promptly after the withdrawal deadline.

The company also announced that it has extended the early tender consideration to all eligible holders of existing notes up to 11:59 p.m. ET on May 7.

Holders that validly exchange their notes will be eligible to receive $1,043.75 principal amount of new notes per $1,000 principal amount of existing notes.

Eligible holders may elect to receive 2026 secured notes, 2030 secured notes or a combination as of the early tender consideration.

Previously, those who tendered after the April 23 were only eligible to receive $980.00 of new notes per $1,000 of existing notes.

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.

As previously reported, the purpose of the exchange is to better align Cobre del Mayo’s debt service requirements with its anticipated cash generation capabilities.

A recent increase in copper prices and its decision to restart mining operations in January makes the company confident it will 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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