Hornbeck holders swap out $131.63 million of 5 7/8% notes for loans

By Susanna Moon

Chicago, Feb. 5 – Hornbeck Offshore Services, Inc. said holders had tendered $131,629,000 of its $366,942,000 5 7/8% senior notes due 2020 in the exchange offer that ended at 11:59 p.m. ET on Feb. 4.

As announced Jan. 7, the company was originally offering to exchange up to $200 million of the notes for new 9½% second-lien term loans due 2025 of the company and its wholly owned subsidiary, Hornbeck Offshore Services, LLC.

Then on Jan. 22, the company set the clearing price at $850 principal amount of term loans per $1,000 principal amount of notes tendered for exchange, lowered the exchange cap to $185 million and extended the early premium to notes tendered by the end of the offer.

As a result, the company will incur $111,884,650 of term loans upon settlement of the exchange on Feb. 7, according to an 8-K filing with the Securities and Exchange Commission.

The press release announcing the results on Tuesday contained a typographical error by stating the amount of the term loans incurred, the filing noted.

As previously announced, holders had tendered and given consents for more than one-third of the notes as of the early deadline at 5 p.m. ET on Jan. 18.

Pricing 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 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.

Along with the offer, Hornbeck was 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.

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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