Abraxas Petroleum extends exchange offer for 11½% '04 notes

Abraxas Petroleum Corp. said on Monday (Jan. 13) that it had extended its previously announced offer to exchange cash, stock and new debt for its existing Series A and Series D 11½% senior secured notes due 2004 to 12 midnight ET on Monday, subject to possible further extension, from its previous deadline at 12 midnight ET on Friday (Jan. 10).

As of the close of business on Friday, $151 million principal amount of the notes had been validly tendered or guaranteed - up slightly from the $150.9 million which had been tendered or guaranteed by the prior deadline on Wednesday (Jan. 8), but still well below the minimum tender threshold of 99% of the approximately $189 million of outstanding notes, which is a condition for the completion of the offer, among other conditions.

AS PREVIOUSLY ANNOUNCED: Abraxas, a San Antonio, Tex.-based independent oil and natural gas exploration and production company, said on Dec. 9 that it was beginning the exchange offer for its 11½% notes, which the company had jointly issued along with its wholly owned subsidiary, Canadian Abraxas Petroleum Ltd.

Abraxas said that it would offer the holders of the existing notes a package consisting of $264 in cash, $610 principal amount of new 11½% series A senior secured notes due 2007 (Abraxas subsequently corrected this to 11½% series A secured notes due 2007 in a press release Thursday, Dec. 12), and approximately 31.36 shares of Abraxas common stock, per $1,000 principal amount of the existing notes tendered.

Abraxas said that the interest on the new notes would be payable in cash unless prohibited; if cash interest payments are prohibited, interest would be paid in kind (i.e., paid the form of additional new notes) in principal amount equal to the amount of the accrued and unpaid interest on the new notes, plus an additional 1% per annum accrued interest for the applicable period.

Abraxas further said that the notes and shares of its common stock to be issued in the exchange offer have not been registered for unrestricted public trading under the Securities Act of 1933, as amended.

On Dec. 12, Abraxas, in addition to correcting the nomenclature of the new notes being offered as part of the exchange offer consideration, said that the offer would expire at 12 midnight ET on Tuesday (Jan. 7), which was subsequently extended several times when the minimum tender threshold was not achieved.

Herbst Gaming solicits 10¾% '08 noteholder consents

Herbst Gaming, Inc. said Monday (Jan. 13) that it will solicit consents from the registered holders of record (as of 5 p.m. ET on Friday, Jan.10) of its 10¾% senior secured notes due 2008 to amending certain provisions of the notes' indenture.

Herbst, a privately held Las Vegas-based casino operator and slot machine route operator, said the solicitation will expire at 5 p.m. ET on Jan. 22, subject to possible extension.

Completion of the consent solicitation is conditioned upon - among other things - the receipt of valid consents to the proposed indenture changes by from the holders of at least 66 2/3% of the principal amount of outstanding notes. The company did not specify the nature of the planned indenture changes in its announcement.

Upon receipt by the company of the required consents and upon execution of a supplemental indenture putting into effect the proposed amendments, Herbst will pay a cash consent payment of $1.25 per $1,000 principal amount of the notes for which a consent was given and not subsequently revoked.

Lehman Brothers Inc. (call 800 438-3242 or 212 528-7581) is the solicitation agent; D.F. King & Co., Inc. (call 800 829-6551; banks and brokers call 212 269-5550) is the information agent for the solicitation.

Premcor sells shares; to redeem 11½% '09 debentures, repay '03, '04 floating-rate notes

Premcor Inc. said on Monday (Jan. 13) that it plans to sell 11.5 million shares of its common stock with an indicative price of $21.85 per share for total net proceeds of approximately $251 million; the company plans to use a portion of the total proceeds from the stock sale and an upcoming issue of new bonds to redeem currently outstanding bond debt.

AS PREVIOUSLY ANNOUNCED: Premcor, a Greenwich, Conn. -based petroleum refiner and marketer, said in a filing with the Securities and Exchange Commission on Friday (Jan. 10) that it planned to issue $251 million of new stock, while its Premcor Refining Group subsidiary would issue $400 million of new senior debt notes due in 2010 and 2013.

Premcor said it would use $42.4 million of the proceeds to redeem all of the outstanding 11½% senior subordinated debentures due 2009 issued by the company's Premcor USA subsidiary, which are currently redeemable at 105.75% of their face value (i.e. $1,057.50 per $1,000 principal amount).

The company also plans to repay all $240 million principal amount of the outstanding floating-rate notes scheduled to mature this year and in 2004, which were issued by Premcor Refining Group. Those notes can be repaid any time at their par value.

In addition to the note repayments, Premcor said that it would use approximately $315 million of the $650 million total expected proceeds from the sale of the securities to pay for its purchase of a refinery in Memphis, Tenn. and related assets from The Williams Cos., would use $16.6 million for general corporate purposes, and $36 million for fees and expenses.

The company further said that neither the consummation of the stock offering nor the consummation of the debt financing would be contingent on the other or on the completion of the Memphis refinery acquisition. It said that it would retain "broad discretion" as to the use of the net proceeds currently allocated to the Memphis refinery acquisition if that transaction were not to be completed.

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