Baffinland expects early settlement of tender for 12% notes on June 27

By Wendy Van Sickle

Columbus, Ohio, June 25 – Baffinland Iron Mines Corp. said it expects to satisfy the conditions of its previously announced cash tender offer and consent solicitation for its outstanding $350 million of 12% senior secured notes due 2022 and to have its early settlement date on June 27, according to a press release issued on Monday.

The company announced last week it had received early tenders of all $350 million of the notes by the consent date of 5 p.m. ET on June 19.

The tender offer and consent solicitation were subject to conditions, including that the issuer has completed an offering of senior secured debt securities and/or a new senior secured credit facility sufficient to refinance the 12% notes and that it receives consents from lenders under its revolving credit agreement to effect its contemplated refinancing.

Baffinland said the first condition will be satisfied with the settlement of its offering of $575 million of 8¾% notes. The receipt of consents from the lenders is expected to be satisfied by an amendment to the revolver, which is expected to be entered into on June 27.

The company was soliciting consents from holders to amend the note indenture to, among other things, eliminate substantially all of the restrictive covenants, some events of default and related provisions and to release all of the collateral securing the notes.

Baffinland offered a total consideration of $1,157.50 per $1,000 of notes to holders who tendered their notes by the consent date.

The total consideration includes a $30 consent fee per $1,000 of notes.

The tender expiration date is 11:59 p.m. ET on July 3.

The issuer will also pay accrued interest to but excluding the settlement date.

Baffinland and co-issuer Baffinland Iron Mines LP announced the tender offer and consent solicitation on June 6, at which time they said they had entered into support agreements with some non-affiliated holders of the notes representing about 70% of the principal amount of the outstanding notes who had agreed to tender their notes and deliver their consents prior to the consent date.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) is the dealer manager for the tender offer and solicitation agent for the consent solicitations.

D.F. King & Co., Inc. (212 269-5550, 800 581-3783 or baffinland@dfking.com). is the tender agent and information agent for the tender offer.

The issuer is the developer of an open pit iron mine in the Mary River area of Baffin Island, Nunavut, Canada.

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