By Susanna Moon
Chicago, Sept. 25 – Goodrich Petroleum Corp. said it plans to issue $75 million principal amount of its 8 7/8% second-lien senior secured notes due 2018 in separate privately negotiated exchange agreements.
Under the exchange agreements, Goodrich Petroleum will retire about $158.2 million aggregate principal amount of its outstanding 8 7/8% senior notes due 2019, according to a company press release.
Many terms of the new notes to be issued are the same as the current notes, including the ranking, security and final maturity.
The notes are callable at par plus accrued interest beginning March 15, 2017.
In addition, some holders who exchange their notes will receive 10-year warrants for 6 million shares of the company’s common stock at an exercise price of $1.00 per share, which are exercisable on a cashless basis.
Under the warrant agreement, the second-lien notes and warrants will not be separately transferable for 60 days. At that time, the warrants will become convertible on a cashless basis based on an exercise price of $1.00. Any warrants not exercised in 10 years will expire.
The warrant strike price is a 38.89% premium to the company’s closing price on Sept. 21.
After the exchange on Oct. 1, about $116.8 million principal amount of the notes will remain outstanding with terms unchanged.
Amendments, other details
Along with the exchange, the company said it expects to enter into new amendments to its second amended credit agreement and its existing 8% second-lien senior secured notes due 2018 to allow for the transaction and also to allow for the company to incur a new third-lien debt basket to be used for additional exchanges of existing notes in an amount up to $50 million.
The company said it also expects that its borrowing base under the amended credit agreement to be reduced to $75 million from $105 million.
Afterward, the company will have reduced its outstanding debt by about $83.2 million, which would cut annual interest expense by $7.4 million.
Goodrich is a Houston-based independent oil and gas exploration and development company.
New notes, warrants
| Issuer: | Goodrich Petroleum Corp.
|
| Issue: | Second-lien senior secured notes
|
| Amount: | $75 million
|
| Maturity: | 2018
|
| Coupon: | 8 7/8%
|
| Warrants: | For 6 million shares
|
| Warrant strike price: | $1.00 per share
|
| Warrant expiration: | 10 years
|
| Call option: | At par beginning March 15, 2017
|
| Settlement date: | Oct. 1
|
| Stock symbol: | NYSE: GDP
|
| Stock price: | $0.72 at close Sept. 21
|
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