Overseas Shipholding gives tender, consent-only results for four notes

By Susanna Moon

Chicago, Jan. 25 – Overseas Shipholding Group, Inc. announced the results of the tender for four series of notes, with the offer for one series running until 11:59 p.m. ET on Jan. 22.

As announced on Dec. 2, Overseas Shipholding was tendering for up to $119,076,000 principal amount of its 8 1/8% senior notes due 2018 and for any and all of its 7˝% senior notes II due 2021, 7˝% senior notes I due 2021 and 7˝% senior notes due 2024.

Holders had tendered $234,041,000 principal amount, or 98.27%, of the 2018 notes, $102,264,000 principal amount, or 99.70%, of the election 2 notes and $3,508,000 principal amount, or 100%, of the election 1 notes as of the tender offers that ended at 11:59 p.m. ET on Dec. 30.

Investors had tendered another $350,000, or 0.15%, of its 8 1/8% senior notes due 2018 and $60,000 principal amount, or 0.06%, of 7˝% senior notes II due 2021 under the consent-only option.

Because the tender for the 8 1/8% notes has been oversubscribed as of 5 p.m. ET on Dec. 15, the early tender date, the company said it accepted the notes for purchase on a prorated basis and did not accept any 2018 notes tendered after the early tender deadline, according to a company news release.

The company said it executed supplemental indentures to the 2018 notes, the election 1 notes and the election 2 notes on Dec. 16.

As of the expiration time for the tender offer at 11:59 p.m. ET on Jan. 22, investors had tendered $294,000, or 42.98%, of the 2024 notes, excluding those held by the company or its affiliates. Holders tendered another $52,000 principal amount, or 7.6%, of the 2024 notes under the consent-only option.

As announced Jan. 14, the company further extended the tender offer for any and all of its 7˝% senior notes due 2024 and waived a condition to the completion of the offer.

The tender offer and the consent solicitation for the 2024 notes ended at 11:59 p.m. ET on Jan. 22, pushed back from 11:59 p.m. ET on Jan. 14. On Jan. 4, the company extended the offer from the original deadline of Jan. 4.

Overseas Shipholding also waived the condition requiring that a supplemental indenture be executed.

As of 5 p.m. ET on Jan. 14, holders had tendered $294,000, or 42.98%, of the notes. Consents have been delivered for another $52,000, or 7.6%.

That response was up from $204,000 principal amount, or 29.82%, tendered as of Jan. 4 with consents delivered for another $2,000 principal amount, or 0.29%. The figures exclude securities held by the company or its affiliates.

Offer terms

As previously announced, holders could either tender their notes under the tender offer or separately deliver their consents under the consent solicitation without tendering their notes under the tender offer. Those who tender their notes will be deemed to consent to the proposed amendment.

The total purchase price for each $1,000 principal amount is $1,090 for the 8 1/8% notes and $1,130 for all of the other note series.

The tender offer payment per $1,000 of notes is $1,030 for the 8 1/8% notes, $1,070 for the 7˝% notes II due 2021, $1,070 for the 7˝% notes I due 2021 and $1,100 for the 7˝% notes due 2024.

For each series, the total amount includes a $30.00 consent payment per $1,000 par amount.

For the 2018 notes, the election 2 notes and the election 1 notes, the total amount also includes an early tender premium of $30.00 per $1,000 of notes tendered by the early tender date and consent payment date.

Holders also will receive accrued interest to but excluding the payment date.

Early results

As of 5 p.m. ET on Dec. 15, holders had given their consents for a majority of the 2018 notes and at least 66 2/3% of the election 2 notes and the election 1 notes, which was enough to execute supplemental indentures to those notes.

Investors had tendered $234,041,000 principal amount, or 98.27%, of the 2018 notes; $102,262,000 principal amount, or 99.7%, of the election 2 notes; and $3,508,000 principal amount, or 100%, of the election 1 notes.

Under the consent-only option, holders also had given their consents for another $350,000 principal amount, or 0.15%, of the 2018 notes outstanding and $60,000 principal amount, or 0.06%, of the election 2 notes.

For the updated offers, tendered notes may no longer be withdrawn as of the early deadline. The consent-only option under those offers also has expired.

The consent-only option for the 2024 notes also had been set to end at 11:59 p.m. ET on Jan. 4.

For the 2024 notes, tenders may not be withdrawn and consents revoked after 5 p.m. ET on Dec. 21.

More details

Because the offer for the 2018 notes was oversubscribed, the company will accept the tendered notes for purchase on a prorated basis. Even if a holder’s tendered 2018 notes are prorated, the holder will be deemed to have delivered consents for all the 2018 notes tendered and will receive the consent payment for all the 2018 notes returned to the holder, the company previously said.

The tender offers and the consent solicitations are subject to conditions. The execution of the supplemental indenture to the indenture of the 2018 notes required the consent of a majority of the outstanding notes, excluding those held by the company or an affiliate. Execution of the supplemental indentures to the 2018 notes and election 2 notes are conditions to the tender offer and the consent solicitation for the 2018 notes, which has now been satisfied.

The execution of the supplemental indentures to the election 2 notes, election 1 notes and 2024 notes required the consents of 66 2/3% principal amount outstanding of each series, excluding notes held by the company or an affiliate.

Execution of the supplemental indentures to the indentures governing the 2018 notes and election 2 notes are conditions to the tender offer and the consent bid for the election 2 notes. The tender offer and the consent solicitation for each of the election 1 notes and 2024 notes is not conditioned on the consent solicitation for any other series of notes. However, the tender offer and the consent solicitation for the election 1 notes and 2024 notes is conditioned on the execution of the supplemental indenture to amend the indenture to each series of notes.

The principal amount outstanding held by non-affiliates as of Dec. 2 was $238,151,000 of the 8 1/8% notes, $102,565,000 of 7˝% notes II due 2021, $3,508,000 of 7˝% notes I due 2021 and $684,000 of the 7˝% notes due 2024.

Jefferies LLC (888 708-5831 or 203 363-8273) is the dealer manager and solicitation agent. Ipreo LLC (888 593-9546) is the information agent and depositary.

Overseas is a New York-based tanker company.

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