By Susanna Moon
Chicago, Dec. 29 – EP Energy Corp. subsidiary EP Energy LLC and Everest Acquisition Finance Inc. will issue $1.1 billion principal amount of new 9 3/8% senior secured notes due 2024 and pay $47,707,200 in cash in the exchange that ended at 5 p.m. ET on Dec. 28.
The company began offering to exchange up to $1.2 billion principal amount of new notes on Nov. 20 and amended the terms on Dec. 13 and Dec. 15.
In the end, holders had tendered $954,144,000, or 79.5%, of EP Energy’s $1.2 billion of 9 3/8% notes due 2020. These notes had first priority.
Investors also tendered $53,641,000, or 21.45%, of its $250.06 million of 7¾% notes due 2022 and $139,307,000, or 26.87%, of its $518.52 million of 6 3/8% notes due 2023, each with a priority acceptance level of two.
All conditions of the exchange have been met or waived, and the issuers accepted for purchase all of the tendered notes, with settlement expected to occur on Jan. 3, according to a company announcement.
The companies said on Dec. 22 that they had entered into a second supplemental indenture to the 9 3/8% notes due 2020 after securing the needed consents on Dec. 19.
The early response in the exchange for three series of notes was given on Dec. 20, as well as the amended terms that allowed all participants to receive the total amount regardless of when they tender.
As amended on Dec. 14, holders will receive $50.00 in cash and $1,000 of new notes for each $1,000 principal amount of 9 3/8% notes, $725 principal amount of new notes per $1,000 principal amount of priority two notes and $700 principal amount of new notes per $1,000 principal amount of priority three notes.
For the 9 3/8% notes, the $50.00 cash component is the early tender premium. Before the Dec. 14 changes, it was payable in new notes rather than cash.
The early tender premium for the other series of notes is $50 of new notes for each $1,000 of notes tendered by the early deadline.
Originally only holders who participated by the early deadline were to receive the early tender premium but on Wednesday EP Energy amended the offer so that all participants will receive the full amount.
On Dec. 15, EP Energy amended the offer to add its 2025 senior secured notes into the definition of “permitted liens” under the description of the new notes and delete “of any amendment thereto or pursuant to a new loan agreement” immediately after the text “in each case” in the definition of “RBL Facility.”
EP Energy also amended the deadlines. On Dec. 14 it pushed back the early deadline to 5 p.m. ET on Dec. 19 from 5 p.m. ET on Dec. 13. It was previously extended from 5 p.m. ET on Dec. 8 and 5 p.m. ET on Dec. 4.
As announced on Nov. 20, any 7¾% notes or 6 3/8% notes tendered by holders who also tendered 9 3/8% notes will have second priority up to the principal amount of 9 3/8% notes tendered by that holder. Any 7¾% notes or 6 3/8% notes tendered in excess of the principal amount of 9 3/8% notes tendered by a holder will have third acceptance priority.
The company said it may lift the tender cap to $1.4 billion.
In connection with the exchange offers, the issuers were soliciting consents to amend the old notes and the indentures governing the old notes.
The proposed amendments, which required the consent of a majority in principal amount of the outstanding notes of each series, will eliminate or waive substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and transfers of assets, and modify or eliminate certain other provisions in the indentures.
Everest Acquisition Finance Inc. is a co-issuer of the existing notes.
The exchange offers are not conditioned on a minimum principal amount of outstanding old notes being tendered or the issuance of a minimum principal amount of new notes, although there are some other conditions.
D.F. King & Co., Inc. (212 269-5550 or 800 207-3158) is the information and exchange agent.
The oil and natural gas exploration and production company is based in Houston.
New Issue
| Issuers: | EP Energy LLC and Everest Acquisition Finance Inc.
|
| Issue: | Senior secured notes
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| Amount: | $1.1 billion
|
| Maturity: | 2024
|
| Coupon: | 9 3/8%
|
| Settlement date: | Jan. 3
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