Altera Infrastructure offers to swap, seeks consents for 8½% notes

Chicago, July 29 – Altera Infrastructure LP subsidiary Altera Infrastructure Holdings LLC started an exchange offer and consent solicitation for its $686.99 million outstanding 8½% notes due 2023, according to a company release on Thursday.

Exchanging noteholders will have the option of exchanging their existing notes for notes with an extended 2026 maturity date with either interest paid in cash or with interest paid in kind.

The coupon for the cash option will remain at 8½%. If noteholders choose the PIK option, the interest will be 11½%.

In both cases, the total exchange consideration will be $1,000 principal amount of new notes for the existing notes, an amount that includes a $50 consent fee that will be paid as new notes.

Tendering noteholders must tender their notes by 5 p.m. ET on Aug. 11 to receive the total consideration. Noteholders who tender after the early deadline will only receive $950 principal amount of new notes for $1,000 of existing notes.

Interest will also be paid to the settlement date, expected for Aug. 27.

Altera is also soliciting consents to amend the indenture governing the notes to eliminate substantially all of the restrictive covenants and some of the default provisions contained in the old notes indenture.

The company must receive consents from noteholders representing a majority of the outstanding principal amount for the amendments to become effective. The majority amount excludes $411.3 million principal amount of notes held by Brookfield.

Tendering noteholders will be deemed to have consented. Noteholders cannot consent without tendering their notes.

The offer is conditioned upon at least 80% of the principal amount of existing notes being tendered, exclusive of the Brookfield-held notes.

Under a July 29 exchange and support agreement, Altera and Brookfield have agreed to exchange the previously mentioned $411.3 million principal amount of notes, $234.9 million principal amount of loans from a 2020 credit agreement, $30 million of loans under a February 2021 credit agreement and $17 million under a July 26 credit agreement for new PIK notes. The PIK notes will also include new notes representing accrued interest. Regardless of the amount exchanged by other noteholders, the company plans to complete the Brookfield exchange.

The early deadline is also the withdrawal deadline.

The offer will expire at 11:59 p.m. ET on Aug. 25.

D.F. King & Co., Inc is the information and tender agent for the offer (888 605-1958, 212 269-5550, altera@dfking.com).

The dealer managers for the exchange offer and consent solicitation are Citigroup and DNB Markets.

Altera is an energy infrastructure services partnership that operates in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. The company is based out of Aberdeen, Scotland. The company recently moved its headquarters from Bermuda and was formerly part of Teekay.

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