Perpetual Energy extends exchange offer for 8¾% notes due 2018, 2019

By Susanna Moon

Chicago, Dec. 28 – Perpetual Energy Inc. extended the offer to exchange all of its C$36,013,000 of 8¾% senior notes due March 15, 2018 and its C$24.56 million of 8¾% senior notes due July 23, 2019.

Holders may now tender their notes for exchange until 5 p.m. ET on Jan. 11, according to a company update, extended from 5 p.m. ET on Dec. 23.

As announced Dec. 12, the company will issue C$1,000 principal amount of new 8¾% senior notes Jan. 11, 2022 for each C$1,000 principal amount of existing notes tendered for exchange.

The exchange notes will be issued with the same terms as the existing notes other than the extended maturity date and an increased coupon the first year of 9¾% instead of 8¾%, which is the equivalent of C$10.00 per C$1,000 principal amount of notes tendered for exchange.

Holders will also receive accrued interest up to but excluding the expiration date. The amount per C$1,000 principal amount will be C$28.29 for the 2018 notes and C$41.23 for the 2019 notes in cash.

The exchange “will enhance the company’s strategy of long-term value creation for securityholders as well as its assets and operations,” according to a previous company announcement.

“The note exchange proposal will improve the company’s liquidity beyond the current maturity dates of the existing senior notes, enabling Perpetual to pursue strategic growth and value-enhancing opportunities important to its corporate strategy.

“Directing capital to further develop the company’s asset base and augment the profitability of its operations is expected to generate greater short and long term value for securityholders than would the retirement of its existing senior notes.”

Perpetual plans to repay any 2018 notes and 2019 notes not tendered for exchange before their respective maturity dates of March 15, 2018 and July 23, 2019 through proceeds from excess fund flows, asset sales or refinancing, the company said.

The exchange is contingent on holders tendering at least C$20 million aggregate principal amount of the outstanding notes for exchange in the offer.

Assuming all notes are tendered, there will be C$60,573,000 aggregate principal amount of exchange notes outstanding after the exchange.

The directors and officers of Perpetual, as a group, own about C$854,000 principal amount of the existing notes, or about C$73,000 of 2018 notes and about C$781,000 of 2019 notes.

Scotia Capital Inc. (888 776-3666 or michael.lay@scotiabank.com) is the dealer manager and solicitation agent. Kingsdale Shareholder Services (855 682-2031 or contactus@kingsdaleshareholder.com) has been appointed as the information agent. Computershare Investor Services Inc. (800 564-6253 or corporateactions@computershare.com) is the depositary.

Perpetual Energy is a Calgary, Alta., energy company.

© 2015 Prospect News.
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