Mexico’s Oro Negro gets OK to amend bond terms, asks for more changes

By Angela McDaniels

Tacoma, Wash., May 19 – Oro Negro Impetus Pte. Ltd. received bondholder approval to amend the terms of its $175 million of senior secured bonds due 2015 and called a second bondholder meeting to consider some additional amendments, according to notices from bond trustee Nordic Trustee ASA.

The bondholders met on May 19. There were enough bondholders present to form a quorum, and the proposed resolution received 98.4% of the votes.

As a result, the bond agreement will be amended to delay the valuation of the company’s rig until Aug. 31 and to amend and restate clause 13.7(d) to require the company to maintain a minimum asset coverage ratio of 120% at all times after Aug. 31.

Bondholders of record as of May 22 who voted in favor of the resolution will receive a 0.5% consent fee.

As reported on May 4, the company is negotiating a lease contract between the rig’s charterer and Pemex Exploracion y Produccion. Although the determination of the rig’s value will be made “free of any existing charters or other contracts of employment,” the general value of the rig would be influenced by the increase and stabilization of the price of oil, as well as by its prospects for generating revenue in the current market, and thus the issuer wants to obtain the best possible day rate under the lease prior to obtaining a valuation for the rig.

The rig is Oro Negro’s principal asset, and its value is the basis for the secured financing obtained under the bond agreement.

The company said the implementation of the proposal will ensure that there will be no event of default between May 4 and Aug. 31 caused by delaying the rig valuation or the breach of the minimum asset coverage clause.

New consent solicitation

The second meeting will be held at 7 a.m. ET time on June 3.

On May 18, the company agreed to call the second meeting as part of a side letter entered into with an ad hoc group of bondholders.

Among other changes, the proposed amendments would require the ultimate parent company to maintain a minimum equity ratio of 35% at all times after Aug. 31 and add a cross-default clause concerning the company’s 7˝% senior secured bonds due 2019 through Aug. 31.

The company said that the amendments would ensure that there is no event of default caused by breach of the minimum equity ratio clause.

At least half of the voting bonds must be represented at the meeting in order to have a quorum, and the holders of at least two-thirds of the voting bonds represented at the meeting must vote in favor of the amendments in order for them to be made.

The oil and gas services company is based in Alvaro Obregon, Mexico.

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