Hornbeck offers loans for $200 million 5 7/8% notes due 2020

By Wendy Van Sickle

Columbus, Ohio, Jan. 7 – Hornbeck Offshore Services, Inc. began an offer to exchange up to $200 million of its $366,942,000 5 7/8% senior notes due 2020 for new second lien term loans due 2025 of the company and its wholly-owned subsidiary, Hornbeck Offshore Services, LLC, according to a press release issued Monday evening.

The company is offering a total consideration in the range of $760 to $850 million of new term loans for each $1,000 principal amount of the notes, which an early participation premium of $20 of new term loans.

The early participation premium will be paid only to holders who tender their notes by the early deadline of 5 p.m. ET on Jan. 18.

The exact total consideration will be determined by a Dutch auction procedure and will be determined shortly after the early tender deadline. Holders who participate must specify the principal amount of term loans they would be willing to accept in exchange for each $1,000 principal amount of notes, and a clearing price will be set based on those specifications.

The company will also pay accrued interest in cash.

The exchange offer will expire at 11:59 p.m.

The term loans will bear fixed interest at an annual rate of 9.5%.

Wilmington Trust, NA will be the administrative agent and collateral agent of the new term loans.

The term loans will be guaranteed by certain of the company's present and future domestic subsidiaries and secured on a second lien basis, subject to certain permitted liens, by a second-priority interest in the collateral securing the company's existing $300 million first-lien delayed-draw term loan facility, dated June 15, 2017, which was fully drawn as of Dec. 31.

In conjunction with the offer, Hornbeck is also soliciting consents from holder of the notes to some amendments to the note indenture, dated March 16, 2012.

The amendments must be approved by holders of at least a majority of the notes in order to pass.

The offer is contingent on at least majority, or $183,838,000, being tendered for exchange.

Global Bondholder Services Corp. (866 470-3700 or 212 430-3774) is the information and exchange agent.

Oppenheimer & Co. Inc. (212 667-7900 is the dealer manager.

Hornbeck is a Covington, La.-based provider of offshore supply vessels.

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