GMX extends exchange offers for 5% and 4.5% convertibles till Monday

By Susanna Moon

Chicago, Sept. 7 - GMX Resources Inc. said investors tendered about $24.8 million principal amount, or 48%, of its outstanding 5% convertible senior notes due 2013 and about $36.9 million principal amount, or 43%, of its 4.5% convertible senior notes due 2015 by the original offer expiration at 11:59 p.m. ET on Sept. 6.

The offer was extended to 5 p.m. ET on Sept. 10 to allow additional time for the Securities and Exchange Commission to complete the qualification of the indenture governing the new notes under the Trust Indenture Act, according to a company press release. The offer began on Aug. 9.

The company said it intends to accept all notes that have been tendered.

As previously noted, GMX is offering to issue new 9% senior secured second-priority notes due March 2018 in exchange for all $51,997,000 of its outstanding 5% convertibles and for some of its 4.5% convertibles.

The company will issue a total of $60 million of new notes in the exchange offer, according to a previous release.

Interest on the new notes is payable in kind through the second anniversary of the settlement date, with the number of shares based on a 10-day volume-weighted average price, discounted to yield the equivalent of a 12% interest rate.

GMX is offering to exchange up to $52 million of new notes and 288 common shares for each $1,000 principal amount of 5% convertibles. The company will accept all 5% notes tendered in the offer.

In the second part of the offer, the company will issue $700 principal amount of new notes for each $1,000 principal amount of 4.5% convertibles tendered, up to an amount equal to $60 million, less the total principal amount of 5% convertibles tendered in the offer.

Holders also will receive accrued interest through the settlement date.

If the total amount of 4.5% convertibles tendered exceeds the quotient of the notes payment limit divided by 0.7, then the total principal amount of notes that the company may accept for purchase from each tendering holder will be equal to the product of (a) the payment limit times (b) the aggregate principal amount of 4.5% notes tendered by the holder divided by the aggregate principal amount of all 4.5% notes tendered in the offer times (c) 1,000 divided by 700, the release noted.

New notes will be issued only in minimum denominations of $1,000 and integral multiples of $1,000 after that.

Global Bondholder Services Corp. (866 804-2200 or, for banks and brokers only, 212 430-3774) is the information agent.

GMX is an Oklahoma City-based natural gas exploration and production company.

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