EP Energy again extends early deadline to exchange three note series

By Wendy Van Sickle

Columbus, Ohio, Dec. 11 – EP Energy Corp. subsidiary EP Energy LLC extended the early deadline of its offer to exchange three series of its notes for up to $1.2 billion of new 9 3/8% notes due 2024, according to a press release Monday.

The early deadline is now 5 p.m. ET on Dec. 13, pushed back from 5 p.m. ET on Dec. 8 after having previously been extended from the original early deadline of 5 p.m. ET on Dec. 4.

The company launched the offer on Nov. 20.

The deadline to withdraw tenders, which was the same as the original early deadline, was not extended and has passed.

As previously reported, the notes covered by the offer include the $1.2 billion of 9 3/8% notes due 2020, the $250.06 million of 7¾% notes due 2022 and the $518.52 million of 6 3/8% notes due 2023. The 2020 notes have acceptance priority over the other two series.

Any 2022 or 2023 notes tendered by holders who also tendered 2020 notes will have second priority up to the principal amount of 2020 notes tendered by that holder. Any 2022 and 2023 notes tendered in excess of the principal amount of 2020 notes tendered by a holder will have third acceptance priority.

The total consideration for each $1,000 of existing 2020 notes will be $1,000 of new notes, and for each $1,000 of existing 2022 and 2023 notes qualifying as priority 2 notes it will be $725 of new notes. For priority 3 notes, the total consideration for each $1,000 of existing notes will be $700.

In each case, the total consideration includes an early premium of $50 of new notes for each $1,000 of existing notes tendered for exchange by the early deadline.

The final deadline was not given in the original announcement of the exchange offer nor in the subsequent updates from the company.

The company said it may lift the tender cap to $1.4 million.

In connection with the exchange offers, the issuers will solicit consents to amend the old notes and the indentures governing the old notes.

The proposed amendments, which require the consent of a majority in principal amount of the outstanding of each series, will eliminate or waive substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and transfers of assets, and modify or eliminate certain other provisions in the indentures.

EP Energy will not accept consents for the 2022 notes or the 2023 notes if less than the full amount of tendered 2022 notes and 2023 notes are accepted pursuant to the exchange offers.

Everest Acquisition Finance Inc. is a co-issuer of the existing notes.

The exchange offers are not conditioned on a minimum principal amount of outstanding old notes being tendered or the issuance of a minimum principal amount of new notes, although there are some other conditions.

D.F. King & Co., Inc. (212 269-5550 or 800 207-3158) is the information and exchange agent.

The oil and natural gas exploration and production company is based in Houston.

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