Hornbeck sets clearing price for 5 7/8% notes, amends exchange offer

By Susanna Moon

Chicago, Jan. 22 – Hornbeck Offshore Services, Inc. said holders had tendered and given consents for more than one-third of its $366,942,000 5 7/8% senior notes due 2020 as of the early deadline at 5 p.m. ET on Jan. 18.

As announced Jan. 7, the company is offering to exchange a portion of the notes for new 9½% second-lien term loans due 2025 of the company and its wholly owned subsidiary, Hornbeck Offshore Services, LLC.

The exchange offer will remain open until 11:59 p.m. ET on Feb. 4.

On Tuesday, the company lowered the tender cap to $185 million principal amount of 5 7/8% notes from $200 million and extended the early premium to notes tendered by the end of the offer.

The clearing price was set at $850 principal amount of term loans per $1,000 principal amount of notes tendered for exchange, according to a press release.

The clearing price was set at the top end of the $760 to $850 range using a Dutch auction procedure.

Hornbeck said it was also amending the terms of the exchange to conditionally increase the total amount to be paid for each $1,000 principal amount to $870 principal amount of term loans from the clearing price.

The increase is conditioned on the tender and acceptance of at least $185 million principal amount of 5 7/8% notes by the expiration time.

The company said it will also accept notes tendered for exchange after the early deadline in the order in which the notes are tendered up to the amended tender cap, rather than using proration.

The amended offer also removed the minimum tender condition and the required consent condition.

As previously announced, the company was originally offering an early premium of $20 of new term loans only for each $1,000 principal amount of notes tendered by the early deadline.

The company will also pay accrued interest in cash.

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 holders of the notes to some amendments to the note indenture, dated March 16, 2012.

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

Oppenheimer & Co. Inc. (212 667-7900) is the dealer manager. Global Bondholder Services Corp. (866 470-3700 or 212 430-3774) is the information and exchange agent.

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

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