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Dune Energy cannot call 10% convertible preferreds under amendment to 10½% notes
By Angela McDaniels
Tacoma, Wash., Dec. 30 - Dune Energy, Inc. said it amended the indenture for its 10½% senior secured notes due 2012, adding a new covenant under which the company cannot redeem its 10% senior redeemable perpetual convertible preferred stock before June 2, 2013.
Before the amendment, the convertible preferreds were scheduled to become callable on Dec. 1, 2012.
The new covenant could also have an effect on the timing of the convertible preferreds' Dec. 1, 2012 put option, the company warned.
Under the original terms of the convertible preferreds, the conversion price will decrease by 20% and the dividend rate will increase to 12% if the company fails to purchase any convertible preferreds put back to it.
The new covenant will survive any repayment of the 10½% notes, according to an 8-K filing with the Securities and Exchange Commission.
Dune Energy is a Houston-based oil and gas exploration company.
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