Frontera Energy begins tender, seeks consents for 9.7% notes due 2023

By Marisa Wong

Los Angeles, June 7 – Frontera Energy Corp. said it has begun a cash tender offer and consent solicitation for any and all of its $350 million outstanding 9.7% senior notes due 2023 (Cusip: 35905BA5, C35898AA0).

Holders tendering their notes will be required to consent to some proposed amendments to the indenture governing the notes. The proposed amendments would eliminate substantially all of the restrictive covenants and some events of default and related provisions and shorten the minimum notice period for the optional redemption of the notes by the company from 30 days to three business days.

The company is offering to pay a total consideration of $1,048.50 per $1,000 principal amount of notes tendered at or before 5 p.m. ET on June 18, 2021, the early tender date. The total consideration includes an early tender payment of $30 per $1,000 principal amount.

Holders tendering after the early deadline will only be eligible to receive a tender offer consideration of $1,018.50 per $1,000 note.

In either case, the company will also pay accrued interest to but excluding the applicable settlement date.

The offer will expire at 11:59 p.m. ET on July 2.

Settlement for early tendered notes is expected to occur on or about June 21. Settlement for all notes tendered after the early deadline will occur promptly after the expiration time.

Notes tendered and consents delivered may be withdrawn or revoked at any time prior to 5 p.m. ET on June 18.

The proposed amendments to the indenture governing the notes will only become operative if the company receives tenders and consents from holders of a majority of the outstanding principal amount of the notes. The company said it intends to execute a supplemental indenture with the proposed changes as soon as practicable once it receives the required consents.

The tender offer is subject to a financing condition but is not conditioned on the tender of any minimum principal amount of notes.

The offer is being made in connection with a concurrent offering of senior notes.

Holders who wish to tender their notes for cash and also subscribe for the new notes should quote a unique identifier code, which can be obtained by contacting the dealer managers of the tender offer. The company will review tender instructions received on or prior to the early tender date and may, but is not obligated to, give priority to those investors tendering with unique identifier codes in connection with the allocation of new notes

After settlement of early tendered notes, the company plans to issue a notice of redemption for any remaining notes not tendered under the offer.

Citigroup Global Markets Inc. (212 723-6106), Credit Suisse Securities (USA) LLC (800 820-1653) and Itau BBA USA Securities, Inc. (888 770-4828) are acting as dealer managers for the offer.

The depositary and the information agent is Global Bondholder Services Corp. (866 470-3900).

Frontera is a Toronto-based company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America.

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