ION Geophysical holders tender 83.65% of 8 1/8% notes in offer so far

By Susanna Moon

Chicago, April 12 – ION Geophysical Corp. extended the early tender deadline to 4:59 p.m. ET on April 15 in the exchange offer for its $175 million of outstanding 8 1/8% senior secured second-priority notes due 2018, according to an 8-K filing with the Securities and Exchange Commission.

As of 5 p.m. ET on April 11, the previous early tender date, investors had tendered $146,385,000, or 83.65%, of the notes, according to a company press release.

Of the tendered amount, $55,271,000, or 31.58%, was tendered for exchange and $91,114,000, or 52.07%, was tendered in the cash option.

As announced March 28, the company is offering $1,000 principal amount of new 9 1/8% senior secured second-priority notes due 2021 and common stock in exchange for each $1,000 principal amount of 8 1/8% notes.

The number of shares is 10 for each note tendered by the early tender date and seven for each note tendered after the early tender date.

The offer also includes a cash tender option, in which holders may tender their notes for cash, subject to a maximum aggregate amount of cash payable of $15 million plus accrued interest.

Pricing for the cash tender option will be set using a Dutch auction in which holders must specify a price between $430 and $600 per $1,000 principal amount of notes.

The exchange offer, including the cash tender option, will continue until 11:59 p.m. ET on April 25.

The company also is soliciting consents to amend the 8 1/8% notes to release all of the second-priority security interest in the collateral securing the notes and grant of a third-priority security interest in the collateral, subordinate to liens securing all senior and second priority debt of the company, including the company's revolving credit facility and the new notes, and eliminate substantially all of the restrictive covenants and some events of default.

No consent fee is being offered.

The company will accept for purchase notes tendered under the cash tender option beginning with those for which the lowest price has been specified until it has accepted for purchase an aggregate amount of notes equal to the cash tender cap, subject to proration for the last class of bids that still fits under the cash tender cap.

Holders will also receive accrued interest in cash up to but excluding the settlement date.

In order to participate in the exchange, holders must tender all of their notes.

The offer is conditioned on tenders for at least 90% of the notes, receipt of the needed consents and amendment of the company’s revolving credit facility for the issue of the new notes.

The offer is open to noteholders who are qualified institutional buyers under Rule 144A and accredited investors under Regulation S.

The dealer manager is Oppenheimer & Co. Inc. (800 221-5588 or 212 667-8104). The information agent is D.F. King & Co., Inc. (866 620-8437, 212 269-5550 or dfking.com/io).

ION Geophysical is a Houston-based provider of geophysical technology, services and solutions for the oil and gas industry.

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