Ascent Resources - Utica, LLC And ARU Finance Corporation Announce Expiration And Final Results Of Their Offer To Exchange Outstanding 3.50% Convertible Subordinated Notes Due 2021 For New 3.50% Convertible Subordinated Notes Due 2021 And New Junior Secured Loans Due 2019
OKLAHOMA CITY, Feb. 19, 2016 /PRNewswire/ -- Ascent Resources – Utica, LLC (formerly known as American Energy – Utica, LLC) ("ARU") and ARU Finance Corporation (formerly known as AEU Finance Corporation) ("Finco" and together with ARU, the "Issuers"), subsidiaries of Ascent Resources, LLC (formerly known as American Energy Appalachia Holdings, LLC), announced today the expiration and final results of their private offer to exchange (the "Exchange Offer"), upon the terms and subject to the conditions set forth in the information memorandum, dated January 21, 2016, as supplemented on January 26, 2016, the related letter of transmittal and the related beneficial owner information form, any and all of the outstanding 3.50% Convertible Subordinated Notes due 2021 (the "Existing Convertible Notes") held by eligible holders, for newly issued 3.50% Convertible Subordinated Notes due 2021 (the "New Convertible Notes") and incremental junior secured loans due 2019 (the "New Junior Secured Loans").
The Exchange Offer expired at 11:59 p.m. New York City time on February 18, 2016 (the "Expiration Date"). As of the Expiration Date, approximately $662 million in aggregate principal amount of the Existing Convertible Notes, representing 90% of the outstanding principal amount of the Existing Convertible Notes, were validly tendered and not validly withdrawn pursuant to the Exchange Offer. The Issuers have accepted for exchange all of the Existing Convertible Notes that were validly tendered and not validly withdrawn. In exchange for the Existing Convertible Notes, the Issuers will issue approximately $639 million in aggregate principal amount of the New Convertible Notes and ARU will incur approximately $34 million in aggregate principal amount of New Junior Secured Loans. Immediately following the settlement of the New Convertible Notes and the cancellation of the validly tendered and accepted Existing Convertible Notes, which is expected to occur on or about the fourth business day following the Expiration Date (the "Settlement Date"), $74 million in aggregate principal amount of the Existing Convertible Notes will remain outstanding.
In exchange for each $1,000 principal amount of the Existing Convertible Notes that has been validly tendered and not validly withdrawn, plus the accrued and unpaid interest thereon, which the Issuers have elected to pay in kind, at or prior to 5:00 p.m. New York City time on February 5, 2016 (the "Early Participation Date"), the eligible holder will receive total exchange consideration consisting of (i) $50 principal amount of the New Junior Secured Loans plus an additional principal amount of New Junior Secured Loans corresponding to 5% of any accrued and unpaid interest on the Existing Convertible Notes and (ii) $950 principal amount of the New Convertible Notes plus an additional principal amount of New Convertible Notes corresponding to 95% of any accrued and unpaid interest on the Existing Convertible Notes (the "Total Exchange Consideration").
In exchange for each $1,000 aggregate principal amount of the Existing Convertible Notes that has been validly tendered and not validly withdrawn, plus any accrued and unpaid interest thereon, which the Issuers have elected to pay in kind, after the Early Participation Date but prior to Expiration Date, the eligible holder will receive exchange consideration consisting of (i) $1,000 principal amount of the New Convertible Notes and (ii) an additional principal amount of New Convertible Notes corresponding to any accrued and unpaid interest on the Existing Convertible Notes. The Issuers plan to incur the New Junior Secured Loans and issue the New Convertible Notes on the Settlement Date. The New Convertible Notes are not and will not be listed on any securities exchange.
The following table sets forth the exchange consideration, early participation premium, and Total Exchange Consideration for the Existing Convertible Notes:
Title of Old Notes |
CUSIP Number |
ISIN |
Principal Amount Outstanding |
Exchange Consideration per $1,000 Principal Amount of Existing Convertible Notes Tendered After Early Participation Date |
Early Participation Premium(1) |
Total Exchange Consideration per $1,000 Principal Amount of Existing Convertible Notes Tendered Before Early Participation Date |
|
Principal Amount of New Junior Secured Loans |
Principal Amount of New Convertible Notes |
||||||
3.50% Convertible Subordinated Notes due 2021 |
025644 AA3 |
US02564 |
$735,398,125.00 |
$1,000 principal amount of New Convertible Notes plus an additional principal amount of New Convertible Notes corresponding to any accrued and unpaid interest on the Existing Convertible Notes |
$50 principal amount of New Junior Secured Loans plus an additional principal amount of New Junior Secured Loans corresponding to 5% of any accrued and unpaid interest on the Existing Convertible Notes |
$50 principal amount of New Junior Secured Loans plus an additional principal amount of New Junior Secured Loans corresponding to 5% of any accrued and unpaid interest on the Existing Convertible Notes
|
$950 principal amount of New Convertible Notes plus an additional principal amount of New Convertible Notes corresponding to 95% of any accrued and unpaid interest on the Existing Convertible Notes |
(1) |
The Early Participation Premium will be net of any applicable withholding taxes. |
The consummation of the Exchange Offer is subject to, and conditional upon, the satisfaction or waiver of certain conditions, including, among other things: (i) the valid tender (without valid withdrawal) of at least 90% in aggregate principal amount of the Existing Convertible Notes, (ii) accession of all participating holders to ARU's existing junior secured term credit agreement, (iii) entry by all participating holders into a subscription agreement with respect to the New Convertible Notes (the effectiveness of which is in turn subject to, and conditioned on, a $212.0 million equity contribution to Ascent, of which $177.0 million is to be contributed to ARU), and (iv) entry by all participating holders into a registration rights agreement with the Issuers. The Issuers expect to meet these conditions on or prior to the Settlement Date.
The New Convertible Notes have not been and will not be registered under the Securities Act or under any state securities laws. The New Convertible Notes may not be offered or sold within the United States or to or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
About Ascent Resources – Utica, LLC:
Ascent Resources – Utica, LLC is an independent natural gas and oil company affiliated with Ascent Resources, LLC that is focused on the acquisition, development and production of unconventional natural gas, natural gas liquids and oil resources in the Utica Shale play in eastern Ohio.
About Ascent Resources, LLC:
Ascent Resources, LLC was created in December 2014 through the combination of Ascent Resources Utica Holdings, LLC (formerly known as American Energy Ohio Holdings, LLC) and Ascent Resources Marcellus Holdings, LLC (formerly known as American Energy Marcellus Holdings), which respectively own Ascent Resources – Utica, LLC and Ascent Resources – Marcellus, LLC (formerly known as American Energy – Marcellus, LLC). Since its inception, Ascent Resources, LLC has established a leading position in the Appalachian Basin, with approximately 280,000 net acres purchased or under contract.
Ascent Resources, LLC and Ascent Resources – Utica, LLC Media Contact: Ms. Anne Pearson, Dennard Lascar Associates, LLC, 210-408-6321, [email protected]
SOURCE Ascent Resources - Utica, LLC
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