Vesta Energy gives early results for 8 1/8% notes exchange offer

Chicago, Oct. 28 – Vesta Energy Corp. announced the early tender results of its offer to exchange new 10% second-lien senior secured step-up notes due Oct. 15, 2026 for existing 8 1/8% senior notes due July 24, 2023 in combination with a consent solicitation, according to a press release.

As of the 5 p.m. ET deadline on Oct. 27, noteholders had tendered C$196.92 million principal amount of existing notes, or 98.5% of the outstanding amount.

Previously reported, Vesta is offering a like amount of notes for the exchange for noteholders who tendered by the early deadline. Noteholders who tender after the early deadline will receive C$950 per C$1,000 note.

Interest will be paid on the existing notes to the settlement date of the offer.

The initial coupon on the new notes will be 10%, will step up to 11% starting Oct. 15, 2023 and then move up to 12% starting Oct. 15, 2024.

The maturity date could be Oct. 15, 2025 if an extension event, as defined in the exchange offer and consent solicitation statement, has not occurred by Dec. 31, 2022.

Olympia Trust Co. will be the trustee and collateral agent.

The new notes will be guaranteed on a senior secured basis by Vesta Energy Ltd., a wholly owned subsidiary of the issuer.

Additionally, the new notes will be secured by a second-priority security interest in all assets and properties of Vesta and the guarantor.

The exchange offer is open to Rule 144A and Regulation S investors. A letter certifying eligibility should be submitted to Computershare Investor Services Inc.

For the consent solicitation, Vesta was soliciting consents to amend the existing indenture for the existing notes in order to remove some covenants and events of default contained in the indenture. Noteholders representing a majority of the notes needed to consent to the changes. Sufficient consents have already been received, according to Thursday’s press release.

Tendering noteholders must consent and vice versa.

The early deadline was the withdrawal deadline.

The exchange offer and consent solicitation expire at 7 p.m. ET on Nov. 12.

The offer was conditioned upon at least half of the notes being exchanged. It is also conditional on an extension of Vesta’s senior secured revolving syndicated credit facilities to May 1, 2023 or later.

Noteholders representing C$97.5 million, or 48.75% of the notes, had indicated they would participate in the exchange offer by the early deadline.

RBC Dominion Securities Inc. is the dealer manager (416 842-6311, 877 381-2099, liability.management@rbccm.com).

Computershare Investor Services is the exchange agent for the offer and the consent solicitation (800 564-6253, 514 982-7555, corporateactions@computershare.com).

Vesta is a Calgary, Alta.-based privately held exploration and production company focused on the exploration, development and production of light oil-weighted properties in the Western Canadian Sedimentary Basin.

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