Advantage Energy Income Fund completes change-of-control offer for 8.75%, 8% convertibles

By Jennifer Chiou

New York, Oct. 19 - Advantage Energy Income Fund said it wrapped its change-of-control offers to purchase all of its 8.75% convertible unsecured subordinated debentures and 8% convertible unsecured subordinated debentures.

The offers ended at 7 p.m. ET on Oct. 17. They began on Sept. 7.

The company issued 3,131,998 tradeable Advantage units for the $35.96 million of securities tendered for exchange while holders of $19.21 million of the debentures tendered their holdings for cash.

The Calgary, Alta., fund previously said that following completion of the business combination involving Sound Energy Trust on Sept. 5, Advantage assumed all of the covenants and obligations of Sound under the indentures for the 8.75% and 8% debentures.

The company noted that, under the change-of-control provisions in the indentures, it was required to make an offer to purchase the convertible within 30 days of the change of control.

Advantage said that it bought the 8.75% notes and 8% notes at 101% plus accrued interest to the acquisition date.

Holders of the debentures could elect to receive the cash consideration or freely tradeable Advantage units. For both the 8.75% and 8% convertibles, holders received 84.1751 Advantage units per $1,000 principal amount, which equated to 95% of the weighted average trading price per unit on the Toronto Stock Exchange for 20 consecutive trading days ending on the fifth day preceding Sept. 5, or $11.88 per trust unit.

Because less than 90% of the total principal amount of debentures was tendered, remaining securities will continue to be outstanding.

As a result of the business combination, Advantage issued about 17 million units and $21.4 million to former Sound unitholders. Advantage has 133.6 million trust units outstanding.

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