Pengrowth Energy to prepay $300 million of 6.35% notes on March 30

By Angela McDaniels

Tacoma, Wash., Feb. 21 – Pengrowth Energy Corp. plans to use cash on hand to prepay $300 million principal amount of its $400 million 6.35% senior notes due July 26, 2017, according to a company news release.

The prepayment will be made on a pro rata basis on March 30 and will include a make-whole payment and accrued interest.

Pengrowth also plans to use cash on hand to retire its C$127 million of convertible debentures at maturity on March 31, 2017.

Following these payments, the company expects its pro forma debt to be reduced to about C$1.1 billion and comprised entirely of senior term notes.

Following the closing of the 4% non-convertible gross overriding royalty on Lindbergh on Jan. 6, the company's cash position was approximately C$530 million.

Pengrowth said it continues to seek out opportunities to further reduce its outstanding debt and improve its balance sheet, including through the disposition of assets. The proceeds from potential asset divestitures, if any, will be used to prepay the remaining outstanding 6.35% notes and to prepay the remaining notes outstanding in order of maturity.

The company is also continuing with ongoing negotiations with its remaining noteholders and bank lenders in an effort to obtain covenant relaxation.

Pengrowth is an oil and natural gas company based in Calgary, Alta.

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