Overseas tenders for some 8 1/8% notes, any and all of three others

By Susanna Moon

Chicago, Dec. 2 – Overseas Shipholding Group, Inc. said it began a tender offer for up to $119,076,000 principal amount of its 8 1/8% senior notes due 2018.

The company also is tendering for any and all of its 7˝% senior notes II due 2021, 7˝% senior notes I due 2021 and 7˝% senior notes due 2024.

Overseas Shipholding also is soliciting consents to amend each series of notes “to affirm that for the purposes of the restriction in the indenture on the company’s ability to dispose of assets, the company’s international operations, held through its subsidiary OSG International, Inc., do not constitute all or substantially all, or substantially an entirety, of the company’s assets,” according to a company press release.

Holders may either tender their notes under the tender offer or separately deliver their consents under the consent solicitation without tendering their notes under the tender offer. Those who tender their notes will be deemed to consent to the proposed amendment.

The total purchase price for each $1,000 principal amount is $1,090 for the 8 1/8% notes and $1,130 for all of the other note series.

The tender offer payment per $1,000 of notes is $1,030 of the 8 1/8% notes, $1,070 of 7˝% notes II due 2021, $1,070 of 7˝% notes I due 2021 and $1,100 of the 7˝% notes due 2024.

For each series, the total amount includes is a $30.00 consent payment per $1,000 par amount.

For the 2018 notes, the election 2 notes and the election 1 notes, the total amount also includes an early tender premium of $30.00 per $1,000 of notes tendered by 5 p.m. ET on Dec. 15, the early tender date and consent payment date.

The tender offers and the consent solicitations for the 2018 notes, the election 2 notes and the election 1 notes will run until 11:59 p.m. ET on Dec. 30. The consent-only option for the 2018 notes, the election 2 notes and the election 1 notes will end at 5 p.m. ET on Dec. 15. The tender offer and the consent solicitation and the consent-only option for the 2024 notes will remain open until 11:59 p.m. ET on Jan. 4.

For the election 2 notes and the election 1 notes, tenders may not be withdrawn and consents may not be revoked after 5 p.m. ET on Dec. 15. For the 2024 notes, tenders may not be withdrawn and consents revoked after 5 p.m. ET on Dec. 21.

Holders also will receive accrued interest to but excluding the payment date.

More offer terms

If the offer for the 2018 notes is oversubscribed, the company will accept the tendered notes for purchase on a prorated basis. Even if a holder’s tendered 2018 notes are prorated, the holder will be deemed to have delivered consents for all the 2018 notes tendered and will receive the consent payment for all the 2018 notes returned to the holder, the company said.

The tender offers and the consent solicitations are subject to conditions. The execution of the supplemental indenture to the indenture of the 2018 notes requires the consent of a majority of the outstanding notes, excluding those held by the company or an affiliate. Execution of the supplemental indentures to the 2018 notes and election 2 notes are conditions to the tender offer and the consent solicitation for the 2018 notes.

The execution of the supplemental indentures to the election 2 notes, election 1 notes and 2024 notes requires the consents of 66 2/3% principal amount outstanding of each series, excluding notes held by the company or an affiliate.

Execution of the supplemental indentures to the indentures governing the 2018 notes and election 2 notes are conditions to the tender offer and the consent bid for the election 2 notes. The tender offer and the consent solicitation for each of the election 1 notes and 2024 notes is not conditioned on the consent solicitation for any other series of notes. However, the tender offer and the consent solicitation for the election 1 notes and 2024 notes is conditioned on the execution of the supplemental indenture to amend the indenture to each series of notes.

If the conditions are not satisfied, the company said it may waive the condition and may terminate, extend or amend the tender offer and consent solicitation and the withdrawal deadline.

The principal amount outstanding held by non-affiliates as of Dec. 2 was $238,151,000 of the 8 1/8% notes, $102,565,000 of 7˝% notes II due 2021, $3,508,000 of 7˝% notes I due 2021 and $684,000 of the 7˝% notes due 2024.

Jefferies LLC (888 708-5831 or 203 363-8273) is the dealer manager and solicitation agent. Ipreo LLC (888 593-9546) is the information agent and depositary.

Overseas is a New York-based tanker company.

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