Comstock increases cap in tender for three series to $1 billion

By Wendy Van Sickle

Columbus, Ohio, Feb. 18 – Comstock Resources, Inc. increased the cap on its cash tender offer for three series of notes to $1 billion, according to a press release Thursday evening.

The company announced the tender earlier in the day with an initial cap of $750 million, and announced the increase after announcing a corresponding increase to $1 billion in its offering of 6¾% eight-year senior notes, which priced Thursday.

The company also increased the combined series cap for its two series of notes due 2026 to $550 million from $325 million.

Specifically, the company is offering to buy, in order of acceptance priority level, the following:

• Up to $325 million of the $619.4 million outstanding of 7½% senior notes due 2025 (Cusips: 223046AA8, U2201LAA1) for a total consideration of $1,048.75 per $1,000 face amount of notes;

• Up to a combined cap with the second series of 2026 notes, up to $550 million of $800 million outstanding of the 9¾% senior notes due 2026 (Cusip: 205768AR5) for a total consideration of $1,102.50 per $1,000 face amount of notes; and

• Up to a combined cap of $550 million with the first series of 2026 notes of the $850 million of 9¾% senior notes due 2026 (Cusip: 205677AB3) for a total consideration of $1,102.50 per $1,000 face amount of notes.

The total consideration in each case includes an early tender premium of $30.00 per note for noteholders who tender by the early tender deadline at 5 p.m. ET on March 3, also the withdrawal deadline.

Interest will also be paid up to, but not including, the applicable settlement date.

Financing for the offers will come from a proposed offering of new notes due 2029 and, if necessary, borrowings from the company’s bank credit facility. The offers are conditioned upon the completion of the debt financing.

The offers are subject to proration.

Consent solicitation

The company is also seeking consents from noteholders to eliminate substantially all of the restrictive covenants and certain events of default under the indentures and modify certain notice requirements for redemption of the notes.

The modifications will become operative if a majority of the notes in the series are tendered and accepted for purchase.

In the event of proration, consents delivered for that series of notes shall be null and void.

Details

Early settlement is schedule for around March 4.

The final tender deadline is midnight ET on March 17.

Dealer managers for the tender offers are BofA Securities (980 388-3646, debt_advisory@bofa.com) and Wells Fargo Securities (866 309-6316, 704 410-4756).

D.F. King & Co., Inc. is the information agent and tender agent (800 384-7175, 212 269-5550, crk@dfking.com)

Comstock Resources is an independent natural gas producer based in Frisco, Tex.

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