Nexus Energy to issue new notes in exchange for its subordinated notes

By Jennifer Chiou

New York, July 15 - Nexus Energy Ltd. said that it entered into commitment and standstill deeds with 85.82% of the holders of its original A$110 million of unsecured senior subordinated notes due 2013.

As of Thursday, the principal amount had capitalized to A$136.3 million, according to a company release.

In exchange for the existing notes, Nexus Energy has agreed to offer:

• New unsecured senior subordinated notes, with a tranche A due in 2017 and tranche B due in 2013; and

• Up to 35 million Nexus ordinary shares.

Noteholders also agreed to forgo the July 15 interest payment.

Assuming 100% acceptance in the offer, the company will issue a total of A$152.7 million of new notes, comprising A$136.3 million of tranche A notes and A$16.5 million of tranche B notes.

The tranche A notes will have a zero coupon until January 2011 and then will have an 8.5% fixed rate until July 2014. The coupon will then rise to 13% until maturity. The first coupon will be payable in July 2011 with the remainder paid semiannually.

Beginning in July 2014, the tranche A notes will amortize 10% per semiannual period, with a 50% bullet repayment at maturity.

The tranche B notes will have a zero coupon and a bullet repayment in 2013.

The new notes will not be callable prior to July 2014. After that point, the notes may be called at 105% of par, reducing by 1% at each semiannual period until maturity.

On any interest payment after July 15, 2014, the company may repay the new notes upon 30 days notice.

Nexus, located in Melbourne, Australia, is an oil and natural gas exploration company.

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