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ExpressJet to amend 4.25% convertibles due 2023, will lift coupon to 11.25%
By Susanna Moon
Chicago, July 22 - ExpressJet Holdings Inc. said it plans to amend its 4.25% convertible notes due 2023 to provide improved terms and additional flexibility for noteholders.
The changes will apply to noteholders of record on Aug. 2 following the completion of the exchange offer.
Under the current indenture, noteholders may require the company to exchange their notes on Aug. 1. Noteholders who retain their notes will automatically receive the new terms, including:
• Security based on a pro-rata amount of collateral appraised at $181 million, including $96 million in spare parts and $85 million of spare engines;
• Coupon increase to 11.25% from 4.25% over the remaining note term; and
• An additional put right on Aug. 1, 2011.
The amount of collateral will be based on the ratio of the principal amount outstanding on Aug. 2 to $128.2 million, which was the principal amount of notes outstanding on July 22.
The terms of the additional put will be identical to that for the current rights under the indenture for Aug. 1 of 2008, 2013 and 2018.
The trustee supports the company's decision to provide noteholders additional flexibility and improved terms beyond the Aug. 1 put date, according to a press release. The amendments must be reviewed and approved by the trustee.
On July 1, the company said its shareholders approved issuing stock as possible funding for the payment of puts on the convertibles.
The company said it provided written notice to the trustee of its intention to pay the repurchase price of notes put on Aug. 1 in common stock.
Houston-based ExpressJet operates as a regional airline under the name Continental Express.
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