American Energy – Woodford holders exchange $339.7 million of 9% notes

By Toni Weeks

San Luis Obispo, Calif., June 23 – American Energy – Woodford, LLC announced that it received tenders for $339.7 million, or 97.06%, of its existing 9% senior notes due 2022 by 11:59 p.m. ET on June 22, the expiration date for the company’s exchange offer and consent solicitation that began on May 26.

This amount is slightly more than the $336 million that was tendered by 5 p.m. ET on June 8, the early participation deadline.

As previously reported, the company offered new 12% second-lien notes due 2020 for its existing 9% senior notes. For each $1,000.00 principal amount of the existing notes that are tendered, it is issuing $700.00 principal amount of the new notes.

Included in this amount is an early participation consideration of $50.00 principal amount of new notes per $1,000.00 of existing notes that will be paid to those who tendered their notes by the early participation deadline.

Those who tendered after the early date will receive $650.00 of new notes per $1,000.00 principal amount.

According to a press release, the company has accepted for exchange all of the existing notes that were validly tendered and will issue about $237.6 million principal amount of the new notes in exchange for the existing notes.

Settlement is expected on June 24, after which $10.3 million principal amount of the existing 9% notes will remain outstanding.

American Energy – Woodford also solicited and received enough consents to amend the indenture of the existing notes, as previously noted. The changes will eliminate or amend substantially all of the restrictive covenants and reporting requirements and modify certain events of default and various other provisions.

Completion of the exchange and consent solicitation is subject to conditions including the receipt of consents from holders of 85% of the existing notes and the tender of at least 85% of the existing notes, both of which have been satisfied. It was also contingent on the company entering into a new $140 million revolving credit facility, receipt of $100 million of equity contributions from American Energy – Woodford’s sponsors and entry into an intercreditor agreement.

The company said it expects to meet these conditions on the settlement date and is in the process of finalizing a new revolving credit facility with an initial borrowing base of $140 million fully underwritten by MUFG Union Bank, NA, which was arranged on May 27.

In addition, board approval, including support of the largest equity sponsor, was given for the additional equity in May, and the company said in the press release that it has called, and is in the process of funding, $100 million of additional equity from its sponsors.

The offer was conducted under Rule 144A and Regulation S.

Mitsubishi UFJ Securities (USA), Inc., Credit Suisse and Morgan Stanley were dealer managers.

Global Bondholder Services Corp. (212 430-3774 or 866 924-2200) was exchange agent, solicitation agent and information agent.

American Energy – Woodford, based in Oklahoma City, is an oil and natural gas company focused on the Woodford and Mississippi Lime plays in northern Oklahoma. It is affiliated with American Energy Partners, LP.

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