Altera Infrastructure’s exchange offer expires, condition not met

By Mary Katherine Stinson

Lexington, Ky., Aug. 26 – Altera Infrastructure LP subsidiary Altera Infrastructure Holdings LLC announced the expiration of its exchange offer and consent solicitation in a press release Thursday morning.

Since the minimum conditions for the offer were not met, the company will not accept any old notes for exchange and any old notes that were tendered will be returned to the noteholders and the proposed amendments will not become operative.

As previously reported, the company was conducting an exchange offer and consent solicitation for its $686.99 million outstanding 8˝% notes due 2023 excluding $411.3 million principal amount held by Brookfield.

Noteholders were given the option of exchanging their 8.50% senior secured notes due 2023 for 8.50% senior secured notes due 2026 and 11.50% senior secured PIK notes due 2026.

In both cases, the total exchange consideration would have been $1,000 principal amount of new notes for the existing notes, an amount that would have included a $50 consent fee that would have been paid as new notes.

The offer was 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 results of the exchange offer and consent solicitation, the company is concurrently closing the Brookfield Exchanges under the previously announced exchange and support agreement terms.

Altera was 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 needed to receive consents from noteholders representing a majority of the outstanding principal amount, excluding the Brookfield-held notes, for the amendments to become effective.

Tendering noteholders would have deemed to have consented. Noteholders could not consent without tendering their notes.

The original deadline had been extended to 5 p.m. ET on Aug. 16, pushed back from the original deadline of 5 p.m. ET on Aug. 11. The withdrawal deadline was Aug. 11.

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

D.F. King & Co., Inc was 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 were 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, United Kingdom. The company recently moved its headquarters from Bermuda and was formerly part of Teekay.

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