COVINGTON, La., Jan. 7, 2019 /PRNewswire/ -- Hornbeck
Offshore Services, Inc. (NYSE:HOS) (the "Company") announced today
that it has commenced a private offer to exchange (the "Exchange
Offer") up to $200 million aggregate
principal amount (the "Tender Cap") of its outstanding 5.875%
Senior Notes due 2020 (the "Notes") for new Second Lien Term Loans
due 2025 (the "Term Loans") of the Company and its wholly-owned
subsidiary, Hornbeck Offshore Services, LLC (the "Co-Borrower"),
upon the terms and conditions set forth in a confidential offer to
exchange and consent solicitation statement dated January 7, 2019 and a related letter of
transmittal (together, the "Offer to Exchange Statement").
In conjunction with the Exchange Offer, and upon the terms and
conditions set forth in the Offer to Exchange Statement, the
Company is soliciting consents ("Consents") from holders of the
Notes ("Holders") to certain proposed amendments (the "Proposed
Amendments") to the indenture governing the Notes, dated as of
March 16, 2012 (the "Indenture"),
which will become effective with respect to the Indenture if
Consents by Holders representing not less than a majority of the
outstanding principal amount of the Notes are received to adopt the
Proposed Amendments (the "Proposed Amendment Requisite
Consents").
A summary of the Exchange Offer is outlined below:
Notes to be
Exchanged
|
CUSIP
|
Outstanding
Aggregate
Principal
Amount(1)
|
Tender
Cap
|
Early
Participation
Premium(3)
|
Total
Consideration Range(2)(3)(4)
|
5.875% Senior
Notes due 2020
|
440543AL0
|
$366,942,000
|
$200,000,000
|
$20 in Term
Loans
|
$760 to $850 in Term
Loans
|
|
|
(1)
|
Aggregate principal
amount outstanding as of January 7, 2019.
|
|
|
(2)
|
The Total
Consideration includes the Early Participation Premium, which
consists of $20 in Term Loans per $1,000 principal amount of Notes
in excess of the amount of $740 to $830 in Term Loans per
$1,000 principal amount of Notes included in the Exchange
Consideration (as defined below).
|
|
|
(3)
|
The Total
Consideration or Exchange Consideration, as applicable, will be
paid for each $1,000 principal amount of Notes accepted for
exchange. In addition, accrued and unpaid interest will be paid on
the Notes exchanged in the Exchange Offer, up to, but not
including, the Settlement Date.
|
|
|
(4)
|
Each Term Loan dollar
figure represents the principal amount of such Term Loan being
exchanged for each $1,000 principal amount of the Notes.
|
The Company is offering to exchange Notes up to the Tender Cap,
in accordance with the modified Dutch Auction procedures, described
below and as more fully set forth in the Offer to Exchange
Statement.
The Term Loans will be made pursuant to a second lien term loan
agreement (the "Second Lien Term Loan Agreement") to be entered
into by the Company, the Co-Borrower and the subsidiary guarantors
party thereto, respectively, and Wilmington Trust, National
Association, as Administrative Agent and Collateral Agent.
The Term Loans will have a maturity date of the sixth anniversary
of the Settlement Date (as defined in the Offer to Exchange
Statement) and will bear interest at a fixed rate per annum of
9.50%. The Term Loans will be guaranteed by certain of the
Company's present and future domestic subsidiaries and secured on a
second lien basis, subject to certain permitted liens, by a
second-priority interest in the collateral securing the Company's
existing $300 million first-lien
delayed-draw term loan facility, dated June
15, 2017, which was fully drawn as of December 31, 2018.
The Exchange Offer will expire at 11:59
p.m., New York City time,
on February 4, 2019, unless extended
by the Company (the "Expiration Time"). For each $1,000 principal amount of Notes validly tendered
at or prior to 5:00 p.m.,
New York City time, on
January 18, 2019 (as it may be
extended, the "Early Tender Time") and accepted for exchange by the
Company, Holders will be eligible to receive the "Total
Consideration" set forth in the table above, which includes an
early participation premium of $20 in
principal amount of the Term Loans per $1,000 of Notes. For each $1,000 in principal amount of Notes validly
tendered after the Early Tender Time and at or prior to the
Expiration Time and accepted for exchange by the Company, Holders
will be eligible to receive only the "Exchange Consideration" set
forth in the footnotes to the table above.
Promptly following the Early Tender Time (the "Early Acceptance
Date"), whether or not the Exchange Offer is fully subscribed, the
Company will determine the Total Consideration for the Notes and
intends to accept for exchange Notes validly tendered at or prior
to the Early Tender Time, subject to the Tender Cap, proration and
the other terms and conditions of the Exchange Offer.
If the Exchange Offer is not fully subscribed as of the Early
Tender Time, the Company intends to accept for exchange promptly
following the Expiration Time (the "Final Acceptance Date") any
Notes validly tendered after the Early Tender Time and at or prior
to the Expiration Time, subject to the Tender Cap, proration and
the other terms and conditions of the Exchange Offer. The exchange
of consideration for such Notes, if any, will be made on or
promptly following the Final Acceptance Date (such date of
exchange, the "Settlement Date") and will be equal to the Exchange
Consideration. The "Exchange Consideration" for each $1,000 principal amount of Notes validly tendered
pursuant to the Exchange Offer after the Early Tender Time and at
or prior to the Expiration Time and accepted for exchange pursuant
to the Exchange Offer will be equal to the Total Consideration
(which will be equal to the Clearing Price (as defined below)) less
the Early Participation Premium.
All accrued and unpaid interest on Notes exchanged in the
Exchange Offer from the last interest payment date to, but not
including, the Settlement Date will be paid in cash. Interest
on the Term Loans will accrue from the Settlement Date.
The Exchange Offer is conditioned on a minimum of a majority (or
greater than $183,838,000) of the
aggregate principal amount of Notes being validly tendered and
accepted for exchange by the Company in the Exchange Offer (the
"Minimum Tender Condition"). The consummation of the Exchange
Offer is also subject to, and conditioned upon, the satisfaction or
waiver of the other conditions set out in the Offer to Exchange
Statement, including the receipt of the Proposed Amendment
Requisite Consents. The Company reserves the right to waive
or modify any of the conditions of the Exchange Offer, including
the Minimum Tender Condition and receipt of the Proposed Amendment
Requisite Consents, in its absolute and sole discretion. The
consummation of the Exchange Offer is also subject to the Company's
right to amend the Exchange Offer prior to the Expiration
Time. Tenders may not be withdrawn.
The Exchange Offer is being conducted as a modified "Dutch
Auction." Holders who elect to participate must specify the
principal amount of Term Loans they would be willing to accept in
exchange for each $1,000 principal
amount of Notes they choose to tender in the Exchange Offer. The
principal amount of Term Loans that Holders specify for each
$1,000 principal amount of Notes must
be in increments of $5.00, and must
be within a range of $760.00 (the
"Minimum Bid Amount") to $850.00 (the
"Maximum Bid Amount") per $1,000
principal amount of Notes. Holders who tender their Notes but do
not specify a Bid Amount will be deemed to have specified a Bid
Amount equal to the Minimum Bid Amount in respect of Notes tendered
and to accept the Clearing Price (as described below) determined by
the Company in accordance with the terms of the Exchange Offer.
Tenders of Notes for which a price is specified below the Minimum
Bid Amount or in excess of the Maximum Bid Amount will not be
accepted and will not be used for the purpose of determining the
Clearing Price. Tenders of Notes not submitted in whole increments
of $5.00 will be rounded down to the
nearest $5.00 increment.
Subject to the Tender Cap, proration and the other terms and
conditions of the Exchange Offer, the Company anticipates accepting
Notes validly tendered pursuant to the Exchange Offer in the order
of the lowest to the highest Bid Amounts specified by tendering
Holders (in increments of $5.00), and
on the Early Acceptance Date will select the single lowest Bid
Amount per $1,000 principal amount of
Notes (the "Clearing Price") to enable the Company to exchange the
principal amount of Notes equal to the Tender Cap (or, if Notes in
a principal amount less than the Tender Cap are validly tendered,
all Notes so tendered). The Bid Amount at which Notes were validly
tendered on or prior to the Early Tender Time (which includes the
Early Participation Premium) will be used for the purpose of
determining the Clearing Price and proration, as described below,
on the Early Acceptance Date.
The Company will exchange the same consideration (subject to
adjustment, as described below) for all Notes validly tendered at
or below the Clearing Price and accepted for exchange pursuant to
the Exchange Offer. Consideration exchanged for Notes validly
tendered after the Early Tender Time but at or prior to the
Expiration Time and accepted for exchange pursuant to the Exchange
Offer will be reduced by the Early Participation Premium. In
addition, Holders whose Notes are validly tendered and accepted for
exchange pursuant to the Exchange Offer will receive a cash payment
representing the accrued and unpaid interest on such Notes from the
last interest payment date for such Notes preceding the Settlement
Date (October 1, 2018) to, but not
including, the Settlement Date.
If at the Early Tender Time the aggregate principal amount of
the Notes validly tendered at or below the Clearing Price exceeds
the Tender Cap, then on the Early Acceptance Date, the Company
anticipates accepting for exchange (subject to the terms and
conditions of the Exchange Offer), first, Notes validly tendered at
Bid Amounts (in increments of $5.00)
below the Clearing Price and, thereafter, Notes validly tendered at
the Clearing Price on a prorated basis according to the principal
amount of such Notes such that the Company exchanges an aggregate
principal amount of Notes up to the Tender Cap. All Notes not
accepted on the Early Acceptance Date as a result of proration and
all Notes tendered at Bid Amounts in excess of the Clearing Price
will be rejected from the Exchange Offer and will be returned to
tendering Holders.
Any Notes validly tendered at or prior to the Expiration Time
may be accepted subject to proration in accordance with the terms
of the Exchange Offer in the event that the aggregate principal
amount of all Notes validly tendered as of the Expiration Time
would exceed the Tender Cap. Notes validly tendered at or prior to
the Early Tender Time will have priority over Notes validly
tendered after the Early Tender Time and at or prior to the
Expiration Time.
In order for a Holder of the Notes (or its designee) to receive
Term Loans, such Holder of the Notes must provide an executed
signature page to the Second Lien Term Loan Agreement and meet
certain administrative requirements (including completing an
administrative questionnaire and IRS Form W-9 or the applicable
Form W-8). Holders are encouraged to contact the information
and exchange agent as early as possible (even before tendering
Notes) using the email address on the back cover of the Offer to
Exchange Statement to furnish such documentation to the information
and exchange agent.
The complete terms and conditions of the Exchange Offer, as well
as the terms of the Term Loans, are described in the Offer to
Exchange Statement, copies of which may be obtained by Holders of
the Notes by contacting Global Bondholder Services Corporation, the
information and exchange agent in connection with the Exchange
Offer, at (866) 470-3700 (toll-free) or (212) 430-3774 (banks and
brokers) or by visiting the information and exchange agent's
website at http://gbsc-usa.com/Hornbeck.
Oppenheimer & Co. Inc. ("Oppenheimer") is acting as lead
financial advisor and sole dealer manager for the Exchange Offer
and solicitation of Consents. Questions regarding the Offers may be
directed to Oppenheimer whose address and telephone number are as
follows:
Oppenheimer & Co. Inc.
85 Broad Street
New York, NY 10004
(212) 667-7900
None of the Company, its board of directors, its officers, the
dealer manager, the information and exchange agent, the
administrative agent with respect to the Term Loans or the trustee
with respect to the Notes, or any of the Company's or their
respective affiliates, makes any recommendation that Holders tender
or refrain from tendering all or any portion of the principal
amount of their Notes, and no one has been authorized by any of
them to make such a recommendation. Holders must make their own
decision as to whether to tender their Notes and, if so, the
principal amount of Notes to tender. This press release shall not
constitute an offer to exchange, nor a solicitation of an offer to
exchange any security. The Exchange Offer is being made only by the
Offer to Exchange Statement, subject to the terms and conditions
thereof.
Subject to certain restrictions on the Company designed to
protect Holders that participate in the Exchange Offer from being
treated less favorably than non-participating Holders or holders of
the Company's 5.000% Notes due 2021 (the "2021 Notes") in any
subsequent exchanges of Notes or 2021 Notes during the 90 days
following the Effective Date, from time to time following the
Exchange Offer, the Company or any of its affiliates may purchase
additional Notes that remain outstanding in the open market, in
privately negotiated transactions, through tender offers, exchange
offers or otherwise, or may redeem or defease the Notes pursuant to
the terms of the indenture governing the Notes. Any future purchase
may be on the same terms or on terms that are more or less
favorable to Holders than the terms of the Exchange Offer. Any
future purchases by the Company will depend on various factors
existing at that time. There can be no assurance as to which, if
any, of these alternatives (or combinations thereof) the Company
will pursue in the future.
Hornbeck Offshore Services, Inc. is a leading provider of
technologically advanced, new generation offshore service vessels
primarily in the Gulf of Mexico
and Latin America.
Forward-Looking Statements
This news release contains forward-looking statements,
including, in particular, statements about the Company's plans and
intentions with regard to the Exchange Offer. These
statements are based on the Company's current assumptions,
expectations and projections about future events. Although
the Company believes that the expectations reflected in these
forward-looking statements are reasonable, the Company can give no
assurance that the expectations will prove to be correct.
Contacts:
|
Todd Hornbeck,
CEO
|
|
Jim Harp,
CFO
|
|
Hornbeck Offshore
Services
|
|
985-727-6802
|
|
|
|
Ken Dennard, Managing
Partner
|
|
Dennard Lascar /
713-529-6600
|
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SOURCE Hornbeck Offshore Services, Inc.