Denbury accepts $378.27 million of 9¾%, 9½% notes for early settlement

By Angela McDaniels

Tacoma, Wash., Feb. 5 - Denbury Resources Inc. exercised its early purchase option in the tender offer for its $426.4 million of outstanding 9¾% senior subordinated notes due March 2016 and its $224.9 million of outstanding 9½% senior subordinated notes due May 2016, according to a company news release.

Holders had tendered $191,678,000 principal amount, or 45%, of the 9¾% notes and $186,589,000 principal amount, or 83%, of the 9½% notes as of 5 p.m. ET on Feb. 4, the consent payment deadline. The payment for these notes was made Feb. 5.

For each $1,000 principal amount, the holders received $1,054.25 for the 9¾% notes and $1,068.69 for the 9½% notes. These payments include a consent payment of $30.00 per $1,000 principal amount of notes tendered by the early deadline.

Holders also received accrued interest up to but excluding the payment date.

The tender offer will continue until 11:59 p.m. ET on Feb. 19.

Those who tender after the early deadline will receive $1,024.25 per $1,000 principal amount of 9¾% notes and $1,038.69 per $1,000 principal amount of 9½% notes.

9¾% notes to be redeemed

Denbury also announced that it called all of the remaining outstanding 9¾% notes for redemption. The redemption date is March 7, and holders will receive $1,048.75 per $1,000 principal amount of notes plus accrued interest.

Consent solicitation

The company also is soliciting consents to amend the notes to eliminate most of the restrictive covenants and some events of default.

Based on the amount of notes tendered, the company received enough consents to amend the 9½% notes but not the 9¾% notes. A supplemental indenture amending the 9½% notes has been executed.

The tender offer was conditioned on the company securing consents from holders of at least a majority of the outstanding notes, but that condition has been waived.

The tender offer is being funded with the company's new $1.2 billion of 4 5/8% senior subordinated notes due 2023, which priced Jan. 22 and settled Feb. 5.

Bank of America Merrill Lynch (888 292-0070 or 980 387-3907) is the dealer manager and solicitation agent. MacKenzie Partners, Inc. (800 322-2885, 212 929-5500 or tenderoffer@mackenziepartners.com) is the information agent.

Denbury Resources is a Plano, Texas-based oil focused exploration and production company.

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