Ascent gives early results of exchange, consent; minimum condition met

Chicago, Sept. 23 – Ascent Resources Utica Holdings, LLC, and its wholly-owned subsidiary ARU Finance Corp., announced early results for its ongoing exchange offer and consent solicitation for their 10% senior notes due 2022, according to a press release on Wednesday.

As of 5 p.m. ET on Sept. 23, the early tender deadline, approximately $855.6 million, or 92.5%, of old notes had been tendered in the exchange offer and consent solicitation.

Based on results so far, $538 million principal amount of new term loans (the cap mentioned below) would be borrowed and approximately $317.6 million of new notes would be issued upon closing.

Also announced, the minimum tender condition had been satisfied by the early deadline. At least 85% of the old notes needed to be tendered.

There is currently $924.7 million principal amount of notes outstanding (Cusip: 04364VAA1).

Options

There are two options for the exchange, as previously reported.

First, eligible lenders (different from eligible noteholders, i.e. banks and institutional lenders) can exchange any and all of their old notes for a combination of new second-lien term loans with a maturity date of Nov. 1, 2025 and new 9% senior notes due 2027.

The maximum principal amount of new term loans to be issued under option one is capped at $538 million.

Option one is subject to proration on the loan if the cap is exceeded.

The new term loans will be made pursuant to a credit agreement with Wilmington Trust, NA as administrative agent and collateral agent and the lenders of the term loan. Wilmington Trust is also the trustee.

As of the early tender deadline, noteholders had tendered $795.1 million, or 86% of the notes.

Second, eligible noteholders can exchange any and all of their old notes for new notes.

The amount of new debt that will be exchanged according to either option is $1,000 principal amount of new debt per $1,000 principal amount of old notes. The amount is inclusive of a $50 early exchange consideration that will not be paid to tendering noteholders after the early deadline.

As of the early tender deadline, $60.5 million principal amount of notes had been tendered according to the second option, or 6.5%.

Consents

With the exchange offer, the company was also soliciting consents to amend the indenture governing the old notes.

The company was seeking to remove substantially all of the restrictive covenants and certain of the default provisions contained in the old indenture.

A majority of consents had to be received to adopt the revisions and a majority has been received.

The amendments will become effective on the settlement date.

Agreement

The company entered into a support and investment agreement with certain holders of the old notes representing approximately 60.6% of the outstanding principal amount before the offer was announced.

All old notes by the supporting noteholders were expected to be tendered in the exchange offer, thereby the consents of the supporting holders were expected to constitute the requisite consents.

Details

The exchange offer and consent solicitation will expire at 11:59 p.m. ET on Oct. 7.

Settlement is expected for Oct. 13.

D.F. King & Co., Inc is the information agent for the offer (877 732-3614, 212 269-5550; ascent@dfking.com; www.dfking.com/ascentr).

Ascent is an oil and gas exploration and production company based in Oklahoma City.

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