MXenergy once again extends exchange offer for floating-rate notes

By Angela McDaniels

Tacoma, Wash., Sept. 15 - MXenergy Holdings Inc. once more extended the early consent deadline in the private exchange offer and consent solicitation for its floating-rate senior notes due 2011, this time to 5 p.m. ET on Sept. 18 from Sept. 17.

The company also extended the offer expiration to midnight ET on Sept. 19 from Sept. 18.

Holders had tendered about $157.9 million principal amount of notes as of midnight ET on Sept. 14, unchanged from Aug. 29.

The company also updated the conditions to the offer to require the execution and delivery of a stockholders agreement among the company and the holders of at least 90% of the shares of class A exchange common stock, the holders of all of the shares of class B common stock and the holders of at least 90% of the shares of class C common stock.

The updated conditions also require a voting agreement among the holders of at least 90% of the shares of class A exchange common stock and an equity registration rights agreement among the company and its shareholders.

MXenergy noted that the offering memorandum has been updated to reflect the final and execution copies of the descriptions of the amended organizational documents, the stockholders agreement, the class A voting agreement, the class C voting agreement and the equity registration rights agreement and to update the descriptions of the new notes and the intercreditor agreement, among other things.

Offer details

For each $1,000 principal amount of notes exchanged, holders will receive $426.96 principal amount of a new series of 13¼% senior secured notes due 2014, 213.75 shares of the company's newly created class A common stock, $138.15 in cash and accrued interest up to but excluding the settlement date.

The company will also pay a premium of $30.00 for each $1,000 principal amount of the notes tendered by the early deadline.

The number of shares being offered represents 62.5% of the company's common stock.

MXenergy is soliciting consents from the noteholders for proposed amendments that would eliminate or amend substantially all of the restrictive covenants in the note indenture and modify a number of the events of default and some other provisions, including the change-of-control provisions.

Consents are needed from holders of at least a majority of the outstanding notes.

Holders who wish to participate must tender all of their notes, and holders who tender will be deemed to have given consent.

The offer is conditioned on, among other things, the receipt of at least 95% of the notes, the company refinancing and replacing its revolver credit facility and hedge facility, the company amending its current credit facility with Denham Commodity Partners LP, the conversion of MXenergy's series A convertible preferred stock into common stock, the creation of a management incentive plan and the receipt of any consents from government bodies or authorities that are required.

Previous amendments

On Aug. 17, the company increased the payment on offer. It was previously offering $393.33 principal amount of new notes, 188.91 shares, $138.15 in cash and accrued interest, plus the early premium.

The company also amended some of the terms of the new notes being offered. It increased the coupon to 13¼% from 13%, added subordination provisions and made changes to the ranking of the new notes as well as intercreditor and security provisions.

At that time, MXenergy also:

• Increased the minimum tender condition to 95% of the notes from 90%;

• Extended the deadline for closing the offer to Sept. 30;

• Updated the description of capital stock in the offering memorandum to include, among other things, class D common stock and special approval rights granted to the holders of the class A, class B and class C stock;

• Added the requirement that the company repay the existing credit facility with Denham Commodity Partners up to $12 million; and

• Added the requirement that all tendering noteholders execute and deliver the stockholders agreement, the notes registration rights agreement, the equity registration rights agreement and the class A voting agreement.

The exchange offer and consent solicitation began June 29 and are being made only to accredited investors inside the United States and certain non-U.S. investors located outside the United States who have delivered an eligibility letter.

The information agent is Global Bondholder Services Corp. (866 387-1500 or, for banks and brokers only, 212 430-3774).

MXenergy is a retail natural gas and electricity supplier based in Stamford, Conn.

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