EQT seeks consents to amend redemption provision of 5.7% notes due 2028

By Marisa Wong

Los Angeles, May 3 – EQT Corp. announced it has begun a consent solicitation to amend the indenture governing its outstanding $500 million of 5.7% senior notes due 2028 (Cusip: 26884LAQ2) to extend the outside date for the notes’ special mandatory redemption provision, according to a press release.

In October 2022, the notes were issued to partially fund the cash consideration for EQT’s pending acquisition of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC. Under the notes’ indenture, EQT is required to redeem the outstanding notes at 101 plus accrued interest, if any, to the mandatory redemption date if (i) the acquisition is not completed on or before June 30 (the outside date) or (ii) EQT notifies the trustee of the notes that it will not pursue the acquisition.

EQT is seeking consents from noteholders to amend the indenture to extend the outside date from June 30 to Dec. 29, 2023. The extension to Dec. 29, 2023 would align that date with (i) the date on which the purchase agreement relating to the acquisition may be terminated and (ii) the termination date for lender commitments under EQT’s term loan credit agreement.

Adoption of the proposed amendment will require the consent of holders of a majority of the aggregate principal amount of the notes.

The acquisition is not conditioned on the receipt of the necessary consents with respect to the proposed amendment, and the company currently believes it has sufficient funding from cash on hand and commitments under its term loan to fund the cash consideration portion of the acquisition if it is not able to obtain the required consents.

The consent solicitation will expire at 5 p.m. ET on May 9.

Only holders of record as of 5 p.m. ET on May 2 are eligible to deliver consents to the proposed amendment in the consent solicitation.

Consents may be revoked up until the revocation deadline, which is the earlier of the receipt of the required consents and the expiration of the consent solicitation.

The company is offering an initial consent fee of $7.50 for each $1,000 principal amount of notes for which a consent is delivered prior to the expiration time. The initial consent fee is expected to be paid on May 11.

In addition, each holder who delivers a consent prior to the expiration time (and receives an initial consent fee) will also receive a cash payment of $3.75 per $1,000 principal amount if, and only if, as of 11:59 p.m. ET on June 30, (i) the acquisition has not yet been completed and (ii) EQT has not become obligated under the special mandatory redemption provision of the indenture to redeem the notes. The additional consent fee, if applicable, will be paid on July 5.

No consent fee of any kind will be paid if the necessary consents are not received prior to the expiration time.

The company said it intends to execute a supplemental indenture containing the proposed amendment promptly after receipt of the needed consents. However, the amendment will not become operative until the payment in full of the initial consent fee.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-2064) is the lead solicitation agent.

The information and tabulation agent is Global Bondholder Services Corp. (212 430-3774 for banks and brokers or 855 654-2015 for all others; contact@gbsc-usa.com).

EQT is a Pittsburgh-based natural gas production company.

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