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Abraxas Petroleum again extends consent solicitation for 11½% notes
New York, June 28 - Abraxas Petroleum Corp. said it has again extended its solicitation of noteholder consents to proposed changes in the indenture of its 11½% secured notes due 2007.
The solicitation was extended to 5 p.m. ET July 6, subject to possible further extension, from the previous June 28 deadline.
As previously announced, Abraxas - a San Antonio-based oil and gas exploration and production company - said on June 3 that it had begun a consent solicitation for its $128 million principal amount of 11½% notes, seeking to modify the covenants limiting it to $10 million a year in capital expenditures.
It initially set an expiration deadline of 5 p.m. ET June 14, which was subsequently extended multiple times.
The company said that under the proposed amendment, capital expenditures would be limited so that the ratio of the company's consolidated EBITDA to the sum of consolidated cash interest expense plus capital expenditures minus net proceeds from qualifying equity security or subordinated debt offerings could not be less than 1.0-to-1.0 for any fiscal year beginning with the fiscal year ending Dec. 31, 2004.
Abraxas needs consents from holders of a majority of the notes. It initially said that it would pay $10 per $1,000 principal amount to holders consenting to the changes (the consent payment was subsequently increased).
It said that if the consents received were to exceed the majority requirement, then the consent payment would be paid on a pro rata basis.
On June 17, Abraxas said that it would raise the consent payment amount to $15 per $1,000 principal amount, up to a total of $841,000 from the original $10 per $1,000.
Guggenheim Capital Markets LLC is solicitation agent (212 381-7500). Global Bondholder Services Corp. is tabulation agent and information agent (212 430-3774).
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