Rex extends swap for 8 7/8%, 6¼% notes, ups total of new notes offered

By Wendy Van Sickle

Columbus, Ohio, March 14 – Rex Energy Corp. extended and amended its exchange offer for any and all of its $350 million outstanding 8 7/8% senior notes due 2020 and $325 million outstanding 6¼% senior notes due 2022, increasing the amount of new notes it will trade for the existing ones, according to a press release.

The exchange offer and consent solicitation will now continue until 9 a.m. ET on March 29, extended from 9 a.m. ET on March 22. The offer had previously been extended from 9 a.m. ET on March 3.The offer began on Feb. 3.

Additionally, the company is now offering to swap out the notes for up to a total of $675 million principal amount, up from $480 million, of its new 10% senior secured second-lien notes due 2020 and 10,125,000 shares of its common stock.

As of March 14, investors had tendered for exchange about $137,837,000 principal amount, or 39.38%, of the 2020 notes and about $129,849,000 principal amount, or 39.95%, of the 2022 notes, according to a company notice.

Rex also is soliciting consents to amend the notes indentures to eliminate or modify some restrictive covenants and to modify some defined terms.

No consent fees will be paid.

The total exchange amount for each $1,000 principal amount of notes tendered for exchange is now as follows:

• For the 8 7/8% notes, $1,000 principal amount of new notes and 15 shares of common stock. The principal of new notes offered was increased from $740; and

• For the 6¼% notes, $1,000 principal amount of new notes and 15 common shares. The principal of new notes offered was increased from $640.

Eligible holders may elect to receive an additional $7.50 in new notes for each $1,000 principal amount of either series of notes in lieu of the 15 shares.

Holders who validly tendered their notes prior to the original expiration of 9 a.m. ET on March 3 will be deemed to have elected to receive shares. Otherwise, they must withdraw their tenders and submit the revised letter of transmittal dated March 14 if they wish to receive the additional $7.50 in notes.

All holders will receive the increased $1,000 in notes exchange consideration, regardless of when they submitted their tenders.

The issuer has eliminated a previously offered early tender premium, which had consisted of $50 principal amount of the new notes, for notes tendered before 5 p.m. ET on Feb. 17.

The company will pay accrued interest on existing notes accepted in the exchange offer up to but excluding the settlement date in cash, rather than in new notes, as previously offered.

The new notes will mature Oct. 1, 2020, unless more than 85% are exchanged under the offer, in which case the will mature Oct. 1, 2021.

The new notes will bear interest at 0% for the first three semiannual interest payments and 8% thereafter; however, if more than 85% of the existing notes are tendered under the exchange, the new notes will bear interest at a rate of 1% for the first three interest payments and 8% thereafter.

Additionally, the company made certain amendments to the covenants and optional redemption provisions.

The exchange offer and consent solicitation is only made to holders who are qualified institutional buyers under Rule 144A or outside the United States and persons other than U.S. persons under Rule 902 under the Securities Act.

The information agent is D.F. King & Co., Inc. (866 387-9392, 212 269-5550 or dfking.com/rexx).

Based in State College, Pa., Rex Energy is an oil and gas exploration and production company.

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