Forest Oil says tender offer for notes oversubscribed by early date

By Susanna Moon

Chicago, Nov. 22 - Forest Oil Corp. announced the results of the oversubscribed cash tender offer to purchase up to $700 million principal amount of two series of notes as of 5 p.m. ET on Nov. 21, the early tender date.

Investors had tendered about $277.9 million of the $500 million 7½% senior notes due 2020 and $890.6 million of the $1 billion 7¼% senior notes due 2019, according to a company press release.

The notes are listed in order of priority acceptance level.

Forest expects to accept all of the tendered 7½% notes for purchase to accept for purchase and to accept for purchase the 7¼% notes on a prorated basis.

As previously announced, the total purchase price for each $1,000 principal amount will be $1,015 for the 7½% notes and $1,027.67 for the 7¼% notes.

The total payment includes a $30.00 premium per $1,000 of notes tendered the early tender date.

The tender offer is scheduled to end at 11:59 p.m. ET on Dec. 6. The tender offer began Nov. 7.

Those who tender after the early tender deadline will receive per $1,000 par amount $985 for the 7½% notes and $997.67 for the 7¼% notes.

The company also will pay accrued interest to but excluding the settlement date, which is expected to occur the day after closing of the asset sale for early tendered notes.

Tendered notes may no longer be withdrawn, as of the early tender deadline.

The offer is not contingent upon the tender of any minimum principal amount of notes, but the offer is conditioned on closing of the pending sale of the oil and gas assets in the Texas Panhandle area, which is expected to occur on Nov. 25.

Proceeds from the sale of the Texas Panhandle assets also will be used to reduce outstanding borrowings under its credit facility. As of Oct. 31, the company had outstanding borrowings of $136 million under its credit facility.

Wells Fargo Securities, LLC (866 309-6316 or collect at 704 410-4760), BofA Merrill Lynch (888 292-0070 or collect at 980 387-3907) and Citigroup Global Markets Inc. (800 558-3745 or collect at 212 723-6106) are the dealer managers. Georgeson Inc. (888 624-7035) is the information agent.

Forest Oil is a Denver-based oil and gas company.

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