Basic Energy extends offer to swap 10¾% notes for 11% notes due 2025

By Taylor Fox

New York, Nov. 20 – Basic Energy Services, Inc. extended deadlines under its private exchange offer with respect to its $300 million 10¾% senior secured notes due 2023 (Cusip: 06985PAN0, U06858AG6) and the related rights offering and consent solicitation, according to a news release.

As previously reported, Basic is offering to issue up to $80 million of new 11% senior secured notes due 2025 in exchange for the existing notes.

Concurrently, Basic is soliciting consents to amend the indenture governing the notes to eliminate substantially all of the covenants, restrictive provisions and events of default and to release the existing subsidiary guarantees of the existing notes; to modify the description of the secured obligations under the security documents to reflect the refinancing of the existing notes with the new notes; and to cause the existing notes remaining outstanding after the settlement date to be unsecured, without the benefit of any liens on the collateral.

The early deadline for tendering notes was extended to 11:59 p.m. ET Dec. 4 from 5 p.m. ET on Nov. 19.

The exchange offer and consent solicitation will now expire at 11:59 p.m. ET Dec. 8.

The early settlement date is expected to be Nov. 30. Final settlement is expected to occur Dec. 9, and new notes are expected to be issued Dec. 16.

Holders that validly tender their notes before the early tender deadline will receive the early exchange consideration of $400 of new notes for each $1,000 of notes exchanged, plus interest.

Holders who tender their notes after the early tender deadline but before the expiration will receive $350 of new notes for each $1,000 of notes exchanged, plus interest.

The consideration received will be subject to the new notes cap and proration.

If the amount of the new notes required to exchange all existing notes validly tendered and not validly withdrawn at or prior to the early deadline exceeds the new notes cap, then holders who validly tender their notes after the early deadline will not have their existing notes accepted in the exchange offer.

Basic is also offering the right to subscribe to purchase a pro rata portion of $20 million of 9¾% super priority lien senior secured notes due 2025.

The deadline for subscribing to receive new super priority notes has also been extended to 5 p.m. ET Dec. 8 from 5 p.m. ET Nov. 23.

Ascribe Investments III LLC has provided a commitment to purchase $15 million of the new super priority notes not otherwise validly subscribed and paid for under the rights offering.

As consideration for its commitment, Ascribe will be entitled to receive a commitment cash premium of 1.25% of the amount of the new super priority notes issued to it.

Each eligible holder that participates in the offering will also receive a commitment cash premium of 1.25% of the aggregate principal amount of the new super priority notes issued to such holder.

Neither Ascribe nor any participating holders will be entitled to the commitment cash premium if the exchange offer is not completed.

The new notes will at issuance be guaranteed on a joint and several basis by each of Basic’s domestic subsidiaries, other than some subsidiaries that engage in no activities other than in connection with the financing of accounts receivable, and will be secured by liens, junior only to the liens securing the new super priority notes and some other obligations on substantially all of the property and assets of the company and the subsidiary guarantors other than the assets that secure the obligations of the company and the guarantors under the company’s ABL credit agreement.

The new super priority notes will be guaranteed on a joint and several basis by each of Basic’s domestic subsidiaries that guarantees the new notes and will be secured by first priority liens subject to limited exceptions on all of the property and assets of the company and the subsidiary guarantors that secure the new notes.

Tendered notes may not be withdrawn, and consents may not be revoked after the early tender deadline, also the consent effective date.

The exchange offer is subject to customary conditions including a minimum tender condition of 66 2/3% of existing notes.

The consent of at least 66 2/3% of the holders will be required to adopt the amendments.

Holders who tender their notes will be deemed to have delivered consents to the proposed amendments. Holders may not deliver consents without tendering their existing notes and may not tender their existing notes without delivering consents.

D.F. King & Co., Inc. (800 431-9646, 212 269-5550 or basicenergy@dfking) is the information agent.

Basic Energy Services provides well site services and is based in Fort Worth.

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