Floatel nixes consent solicitation for 8% bonds, makes other plans

By Angela McDaniels

Tacoma, Wash., June 25 – Floatel International Ltd. has terminated the consent solicitation for its 8% senior secured callable bonds due 2017 and instead plans to offer to buy them back, according to a company news release.

As previously reported, the company began soliciting consents on May 27 to accelerate the maturity of the notes and to amend the call option.

The company is entering into a $650 million term loan B in order to refinance the bonds and existing credit facilities. The commitments have been received, but due to delays in the documentation process, the company will not be able to meet the timeline necessary to release funds and settle the bonds as stipulated in the consent solicitation.

If the consent solicitation has been successful, the company would have

• Changed the maturity date to June 27, 2014;

• Changed the repayment amount to 108% of par;

• Replaced the existing call option with the option to call the bonds at 108% of par beginning June 16 and shorten the notification period to three business days from 30 business days.

As previously reported, there were not enough noteholders present at the June 11 meeting to form a quorum, so the company planned to hold a second bondholder meeting on June 25.

The second meeting has been canceled. Instead of calling for a new bondholder meeting, the company said it will establish a defeasance pledge and, after it refinances its existing project loans with the new term loan B, will launch an offer to redeem the bonds prior to the Oct. 11, 2014 call date.

At least half of the bonds had to be represented at the June 11 meeting in order to form a quorum. Only 37.46% of the bonds were represented, out of which 66.6% voted in favor of the proposal and 33.4% voted against.

Floatel is a Mölndal, Sweden-based owner and operator of offshore accommodation and construction support vessels.

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