Item 1.01. Entry into Material Definitive Agreements.
On April 24, 2017, Cobalt International Energy, Inc. (the Company), entered into definitive documents in connection with, and
consummated, a debt exchange transaction (the Transaction) with certain holders (the Holders) of the Companys outstanding 2.625% Convertible Senior Notes due 2019 (the 2019 Notes) and 3.125% Convertible
Senior Notes due 2024 (the 2024 Notes). The Transaction consisted of the issuance by the Company of $178,620,000 aggregate principal amount of its 7.750% Second-Lien Senior Secured Notes due 2023 (the Additional Notes) to
Holders in exchange for $6,436,000 aggregate principal amount of 2019 Notes and $296,309,000 aggregate principal amount of 2024 Notes held by the Holders. As a result of the Transaction, the aggregate principal face amount of the Companys
outstanding longterm debt has been reduced by approximately $124.1 million. In addition, after giving effect to Transaction and the Companys other debt exchanges in December 2016 and January 2017, the principal face amount
outstanding under the 2019 Notes and the 2024 Notes has been reduced by $310.4 million in the aggregate.
Exchange Agreement
.
The Transaction was consummated pursuant to the terms and conditions set forth in the exchange agreement (the Exchange Agreement), dated April 24, 2017, among the Company, the Guarantors (as defined below) and the Holders. The
Exchange Agreement is attached as Exhibit 10.1 to this Current Report on Form
8-K
and is incorporated herein by reference. A copy of the Exchange Agreement has been included to provide security holders with
information regarding its terms. It is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Exchange Agreement were made solely for purposes of the Transaction and as
of specific dates, were solely for the benefit of the parties to the Exchange Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Exchange Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to security
holders. Security holders are not third-party beneficiaries under the Exchange Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition
of the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Exchange Agreement, which subsequent information may or may not be fully reflected in the Companys
public disclosures.
Indenture.
The Additional Notes were issued pursuant to the Second Lien Indenture, dated December 6, 2016
(the Original Indenture), among the Company, the Guarantors and Wilmington Trust, National Association, as trustee and collateral agent (the Trustee), as amended, modified and supplemented from time to time, including by the
second supplemental indenture, dated as of April 24, 2017 (the Second Supplemental Indenture and, together with the Original Indenture, the Indenture), among the Company, the Guarantors and the Trustee. The Additional
Notes mature on December 1, 2023 and bear interest at 7.750% per annum, payable semi-annually in arrears on each June 1 and December 1, commencing June 1, 2017. The Additional Notes constitute a further issuance of and form a
single series with the Companys outstanding 7.750% Second-Lien Senior Secured Notes due 2023 issued from time to time pursuant to the Original Indenture in the principal amount of U.S. $723,970,000 (the Existing Notes and, together
with the Additional Notes, the Notes). The Additional Notes will have identical terms as the Existing Notes (including, without limitation, an identical first interest payment) other than the date of issue and the initial price. The
Additional Notes will be entitled to the same benefits under the Indenture, the Intercreditor Agreement for the Notes and the security documents as the Existing Notes. The Additional Notes will initially trade under different CUSIP numbers to the
Existing Notes until the expiration of the applicable holding period under Rule 144 of the Securities Act of 1933, as amended. On or around the first anniversary of the issue date of the Additional Notes, the Additional Notes are expected to trade
fungibly with the Existing Notes under a single unrestricted CUSIP number, subject to applicable law. After giving effect to the issuance of the Additional Notes, the Company will have $902,590,000 principal amount of Notes outstanding. The Second
Supplemental Indenture is attached as Exhibit 10.2 to this Current Report on Form
8-K
and is incorporated herein by reference.
The foregoing summary of the Exchange Agreement, the Additional Notes and the Indenture do not purport to be complete and are qualified in
their entirety by reference to the full text of such agreements attached as exhibits hereto.