Eclipse offers new 9% secured second-lien notes in exchange for 8 7/8% unsecured notes

By Susanna Moon

Chicago, Jan. 22 – Eclipse Resources Corp. said it began a private offer to swap out its $550 million of outstanding 8 7/8% senior unsecured notes due 2023 for new 9% senior secured second-lien notes due 2023.

The exchange value for each $1,000 principal amount will be $500 for notes tendered for exchange by 5 p.m. ET on Feb. 3, the early tender date, and $450 for notes tendered after the early deadline.

Holders will also receive in cash accrued interest to but excluding the settlement date of Feb. 19.

The exchange offer will end at 11:59 p.m. ET on Feb. 18.

Tenders may be withdrawn at any time before the early tender deadline.

The second-lien notes will be initially secured by second-priority liens on substantially all of the company’s and any subsidiary guarantors’ assets. The liens securing the second-lien notes and the related subsidiary guarantees will be contractually subordinated to the liens on the assets securing the company’s revolving credit facility and hedging and bank product obligations, to the extent of the value of the collateral securing the debt.

Any existing notes that remain outstanding following the exchange offer will be effectively subordinated to the second-lien notes, as well as the obligations under the revolving facility and any other secured debt, in each case to the extent of the value of the collateral securing the obligations.

The second-lien notes will rank senior in right of payment to any future subordinated debt. The second-lien notes will initially be fully and unconditionally guaranteed by all of the existing subsidiaries of the company. Any domestic subsidiary of the company formed after the initial issuance date of the second-lien notes that is not an immaterial subsidiary and that guarantees any of the company’s or another subsidiary guarantor’s debt under the company’s or another subsidiary guarantor’s credit or other debt facility will also guarantee the second-lien notes.

The exchange offer is conditioned on a security agreement and related intercreditor agreement and amendment to the company’s revolving credit facility.

The information agent is D.F. King & Co., Inc. (800 511-9495, 212 269-5550 dfking.com/ecr).

Eclipse Resources is an independent exploration and production company based in State College, Pa.

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