ION Geophysical accepts $146.5 million 8 1/8% notes for exchange

By Marisa Wong

Morgantown, W.Va., April 28 – ION Geophysical Corp. said it completed its previously announced exchange offer and consent solicitation relating to its outstanding 8 1/8% senior secured second-priority notes due 2018.

In total, the company accepted for exchange $146,503,000 of its $175 million outstanding 8 1/8% notes.

President and chief executive officer Brian Hanson commented in a press release, “We are very pleased with the success of the exchange offer and the support we received from our bondholders. Almost 84% of the outstanding existing notes were tendered and accepted by the company in the exchange.

“The exchange de-levered our balance sheet by $25,934,000 and extended the maturity of $120,569,000 of our outstanding debt until the end of 2021, providing us with additional flexibility and liquidity and putting us in a position where we are better able to execute our strategic and operating plans in 2016 and for years to come.”

Exchange offer

For each $1,000 principal amount of existing notes tendered for exchange by 11:59 p.m. ET on April 25, the expiration of the offer, the company offered $1,000 principal amount of new 9 1/8% senior secured second-priority notes due 2021 plus either of the following:

• For notes tendered by 4:59 p.m. ET on April 15, the early tender deadline, 10 shares of the company’s common stock; or

• For notes tendered after the early deadline, seven shares of common stock.

Each offer participant had the opportunity to tender all or a portion of its existing notes for a cash payment in lieu of the exchange consideration. The aggregate amount of cash consideration that could be paid for tendered notes accepted for purchase under the cash tender option was $15 million plus accrued interest.

Of the $146,503,000 notes tendered and accepted for exchange, $120,498,000 notes were tendered for the exchange consideration by the early deadline, $71,000 notes were tendered for the exchange consideration after the early deadline, and $25,934,000 notes were tendered under the cash tender option.

In exchange for $120,569,000 of tendered 8 1/8% notes, the company issued $120,569,000 of new notes and 1,205,477 shares of common stock, including 1,204,980 shares issued as early stock consideration.

The cash tender option was fully subscribed. The company accepted for purchase tendered notes at the lowest bid prices until the cash tender cap was reached, subject to proration.

Pricing for the cash tender option was set using a Dutch auction, in which holders had to specify a price between $430 and $600 per $1,000 principal amount of notes, as previously noted.

In exchange for cash consideration totaling $15 million, the company purchased $25,934,000 of the 8 1/8% notes.

The company also paid accrued interest on notes accepted for purchase from the applicable last interest payment date to, but not including, April 28.

Consent solicitation

Concurrently, the company solicited consents to proposed amendments to the indenture governing the 8 1/8% notes. The consent solicitation also expired on April 25.

The proposed amendments release the second-priority security interest in the collateral securing the notes and grant a third-priority security interest in the collateral, subordinate to liens securing all of the company’s first- and second-priority debt, including its revolving credit facility and the new notes, as well as eliminate substantially all of the restrictive covenants, modify the covenants regarding mergers and consolidation and eliminate some events of default.

No consideration was paid to noteholders in connection with the consent solicitation.

As of Thursday, following the exchange offer, the amount of 8 1/8% notes remaining outstanding is $28,497,000.

The offer began on March 28.

The offer was 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 was 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.

© 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.