Mexico’s Oro Negro seeks further amendments to senior secured bonds

By Marisa Wong

Morgantown, W.Va., Aug. 13 – Oro Negro Impetus Pte. Ltd. is seeking an extension of waiver and further amendments to its $175 million senior secured bonds, issue 2014/2015, according to a notice from trustee Nordic Trustee ASA.

The issuer had obtained bondholder approval for two prior amendments to the bonds at meetings held on May 19 and June 3, as previously reported.

The amendments relate to the company’s negotiation of a lease contract between the rig’s charterer and Pemex Exploracion y Produccion. The rig is Oro Negro’s principal asset, and its value is the basis for the secured financing obtained under the bond agreement.

As of Thursday, the discussions are ongoing, and the issuer has not yet agreed on terms of a contract with Pemex. As a result, the company is seeking bondholder approval of further amendments and extensions to previously obtained waivers.

Oro Negro had expected to enter into a contract with Pemex by Aug. 31, and the last amendment required the ultimate parent company to maintain a minimum equity ratio of 35% and a minimum asset coverage ratio of 120% at all times after Aug. 31 and added a cross-default clause concerning the company’s 7˝% senior secured bonds due 2019 through Aug. 31.

The issuer now wants to extend the minimum equity ratio and minimum asset coverage ratio clauses to apply after Oct. 31.

The company is also proposing, among other things, to (a) amend the interest rate payments to allow for interest to be paid by issuance of additional bonds; (b) be permitted to use funds deposited on the liquidity account to fund expenses; and (c) waive the requirement to obtain a valuation of the rig until Nov. 2.

The company said that adopting the proposals immediately – no later than Aug. 28 – would ensure that there will be no event of default caused by breach of the bonds’ clauses relating to equity ratio, asset coverage ratio and required valuation of the rig.

Bondholders will vote on the new proposal at a meeting to be held Aug. 27 in Oslo.

To approve the resolution, holders representing more than two-thirds of the bonds represented at the meeting must vote in favor of the proposal. In order to have a quorum, half of the voting bonds must be represented at the meeting.

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

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