EXCO Resources, Inc. Announces Consent Solicitation to Holders of Outstanding 7.500% Senior Notes Due 2018
EXCO Resources, Inc. (NYSE:XCO) (“EXCO”) today announced the
commencement of a consent solicitation to holders of its outstanding
7.500% senior notes due 2018 (the “Notes”) upon the terms and subject to
the conditions set forth in the Consent Solicitation Statement dated
November 10, 2015 (the “Statement”).
Proposed Amendments and Considerations
The purpose of the consent solicitation is to obtain the requisite
consents to approve the following (together, the “proposed amendments”):
(i) an amendment to the indenture governing the Notes (the “indenture”)
to eliminate the reduction in the amount of secured indebtedness
permitted under EXCO’s credit facilities upon principal payments which
result in a permanent reduction in borrowing capacity of EXCO and its
subsidiaries, and (ii) an amendment to the definition of “Credit
Facilities” in the indenture to include debt securities as a permitted
form of additional secured indebtedness, in addition to term loans and
other credit facilities currently permitted.
The first proposed amendment will result in a fixed $1.2 billion floor
on the amount of indebtedness that may be incurred pursuant to credit
facilities that will not be subject to reduction; provided, however,
that the alternative methodology under the indenture for calculating
EXCO’s maximum permitted secured indebtedness based on ACNTA (as defined
in the indenture) will not be changed.
The second proposed amendment will have no effect on the amount of
secured indebtedness that is permitted to be incurred by EXCO under the
indenture, and will only provide EXCO with flexibility as to the form of
such secured indebtedness, including permitting EXCO to offer secured
notes in lieu of secured credit facility debt, which could have the
effect of broadening EXCO’s investor base.
Fees and Key Dates
The consent solicitation, which is being made pursuant to the Statement,
will expire at 5:00 p.m., New York City time, on November 24, 2015,
unless extended or earlier terminated by EXCO (the “Expiration Date”).
Subject to the terms and conditions of the Statement, including the
receipt of requisite consents with respect to the Notes, EXCO will,
promptly following the Expiration Date, pay each holder a consent fee
equal to $10.00 per $1,000 principal amount of Notes for which a
consent was validly delivered (and not validly revoked). Holders of
Notes for which no consent is delivered will not receive the consent
fee, even though the proposed amendments, if approved by the holders of
the Notes, will bind all holders of such Notes and their transferees.
In addition to the consent fee, if certain requirements set forth in the
Statement are met, EXCO has agreed, promptly after the Expiration Date,
to pay a soliciting dealer fee equal to $2.50 for each $1,000 principal
amount of Notes for which a holder validly delivers and does not revoke
consents to the proposed amendments to retail brokers that are
appropriately designated by their beneficial holder clients to receive
this fee, provided that such fee will only be paid with respect to
consents delivered by holders whose aggregate principal amount of such
Notes is $250,000 or less.
The consent of holders of at least a majority of the outstanding
aggregate principal amount of the Notes is required to approve the
proposed amendments to the indenture governing the Notes. If the
requisite consents to approve the proposed amendments for the Notes have
been validly delivered (and not validly revoked) on or prior to the
Expiration Date, EXCO will enter into a new supplemental indenture with
respect to the Notes. The new supplemental indenture will become
effective upon execution, but will not become operative until the
applicable consent fee has been paid. Once the new supplemental
indenture is effective, however, consents previously delivered may not
The consent solicitation is being made solely on the terms and subject
to the conditions set forth in the Statement. EXCO may, in its sole
discretion, terminate, extend or amend the consent solicitation at any
time as described in the Statement.
IMPORTANT: BENEFICIAL HOLDERS WHOSE NOTES ARE HELD IN THE NAME OF A
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER INTERMEDIARY
SHOULD CONTACT SUCH BROKER OR OTHER INTERMEDIARY PROMPTLY AND OBTAIN AND
FOLLOW THEIR INSTRUCTIONS WITH RESPECT TO THE CONSENT PROCEDURES AND
DEADLINES, WHICH MAY BE EARLIER THAN THE DEADLINES SET FORTH IN THE
Credit Suisse Securities (USA) LLC will act as solicitation agent for
the consent solicitation, and D.F. King & Co., Inc. will act as the
Information, Tabulation and Paying Agent for the consent solicitation.
Questions regarding the consent solicitation may be directed to Credit
Suisse Securities (USA) LLC at (800) 820-1653 (U.S. toll free) or (212)
538-2147 (collect). Copies of the documents may be obtained from D.F.
King & Co., Inc. via the internet at www.dfking.com/exco,
by email at firstname.lastname@example.org or by
telephone at (212) 269-5550 (for banks and brokers) or (800) 884-5197
(for all others).
This announcement does not constitute a solicitation of consents of
holders of the Notes and shall not be deemed a solicitation of consents
with respect to any other securities of EXCO or its subsidiaries. No
recommendation is being made as to whether holders of the Notes should
consent to the proposed amendments. The solicitation of consents is not
being made in any jurisdiction in which, or to or from any person to or
from whom, it is unlawful to make such solicitation under applicable
state or foreign securities or “blue sky” laws.
EXCO Resources, Inc. is an oil and natural gas exploration,
exploitation, acquisition, development and production company
headquartered in Dallas, Texas with principal operations in Texas, North
Louisiana and Appalachia.
Additional information about EXCO Resources, Inc. may be obtained by
contacting Chris Peracchi, EXCO’s Vice President of Finance and Investor
Relations, and Treasurer, at EXCO’s headquarters, 12377 Merit Drive,
Suite 1700, Dallas, TX 75251, telephone number (214) 368-2084, or by
visiting EXCO’s website at www.excoresources.com.
EXCO’s Securities and Exchange Commission (“SEC”) filings and press
releases can be found under the Investor Relations tab.
This release may contain forward-looking statements relating to future
financial results, business expectations and business transactions.
Actual results may differ materially from those predicted as a result of
factors over which EXCO has no control. Such factors include, but are
not limited to: the completion of the consent solicitation and the
delivery of the requisite consents to effect the proposed amendments to
the indenture governing the Notes, continued volatility in the oil and
gas markets, the estimates of reserves, commodity price changes,
regulatory changes and general economic conditions. These risk factors
are included in EXCO’s reports on file with the SEC. Except as required
by applicable law, EXCO undertakes no obligation to publicly update or
revise any forward-looking statements.
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