Brazil’s QGOG extends exchange offer for 6¼% notes by one more day

By Susanna Moon

Chicago, July 18 – Brazil’s QGOG Constellation SA said investors had tendered for exchange $603.9 million principal amount, or 86.3%, of its 6¼% senior notes due 2019 as of 11:59 p.m. ET on July 17, the previous offer expiration.

The exchange will now continue until 5 p.m. ET on July 18 from 11:59 p.m. ET on July 17, according to a company update on Tuesday.

As previously noted, holders had exchanged $603.1 million, or 86.16%, of the 6¼% notes as of 5 p.m. ET on July 12, the previous early tender date, which was extended to 11:59 p.m. ET on July 17.

QGOG is offering to exchange the notes for 9% cash/0½% pay-in-kind senior secured notes due 2024, according to the amended terms announced June 28 after the company’s discussions with bondholders.

The new notes will mature Nov. 9, 2024 with an amortization schedule beginning Nov. 9, 2019.

As announced April 3, the company was originally offering to issue 8½% senior notes due 2024 in exchange for tendered 6¼% notes.

The offer has been extended several times since April 28. The exchange was most recently extended from 11:59 p.m. ET on June 30 and, before that, June 23, June 16 and June 9.

The tender count was recorded at $95.6 million as of the previous offer expiration, before the terms were amended, compared with tenders for $94.9 million as of June 23, $94.9 million as of June 16 and June 9, $94.6 million as of June 2, $94.8 million of the notes as of May 26, $94.3 million as of May 19, $91.6 million on May 12, $89.2 million on May 5 and $88.6 million on April 28.

Holders will now receive $1,000 of new notes plus $20 in cash for each $1,000 of 6¼% notes tendered for exchange by early tender deadline, which had been extended to 5 p.m. ET on July 12 before the most recent extension.

The company gave more details on July 3 of the new notes to be issued in the exchange, which will initially be secured by some assets of the company, including but not limited to each of the company's current unencumbered offshore rigs and drilling vessels and the insurance receivables and charter receivables related to those vessels.

The new notes will amortize semiannually at the following rates: 1¼% of par from November 2019 up to but not including November 2020, 2½% of par from November 2020 up to but not including November 2022 and 3¾% of par after that.

The new notes will also have a springing collateral package that could consist of additional offshore rigs and drilling vessels as well as their related insurance receivables and charter receivables.

The new notes will be guaranteed on a senior secured basis by some subsidiaries of the company, including but not limited to the guarantor of the existing notes, Constellation Overseas Ltd., and the entities that own the unencumbered rigs. The new notes will also be guaranteed on a subordinated basis by Star International Drilling Ltd.

Also, the new notes will have a more restrictive covenant package, including a restriction on dividend payments and additional limitations on the incurrence of debt.

The company previously extended the early deadline to 11:59 p.m. ET on April 28 from 5 p.m. ET on April 17 to provide holders with more time to review the exchange.

Holders who tender after the early deadline will receive $1,000 of new notes per $1,000 principal amount.

QGOG will pay accrued interest in cash.

Concurrently with the exchange, the issuer is soliciting consents to amend the note indenture in order to eliminate substantially all of the restrictive covenants and certain events of default and related provisions.

Holders who tender must deliver consents.

Completion of the offer is subject to the tender of at least 90% of the existing notes.

Ipreo LLC (212 849-3880 or 888 593-9546) is information agent and exchange agent.

QGOG is a Rio de Janeiro-based provider of off- and on-shore drilling in Brazil through subsidiary Queiroz Galvao Oleo e Gas SA.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.