Comstock gets tenders, consents for nearly 90% of 11¼% notes

New York, Feb. 25 - Comstock Resources Inc. (B2/B) said that it received the necessary consents for proposed changes in the indenture of its 11¼% senior notes due 2007 under its previously announced tender offer for the notes and related consent solicitation.

The company said that the tender offer's consent deadline expired as scheduled at 5 p.m. ET on Feb. 24, without extension, and that as of that deadline, holders of $197.668 million of the notes, or about 89.9% of the outstanding principal amount, had delivered valid tenders and consents under the terms of the offer, fulfilling the previously outlined condition that consents be received from the holders of at least a majority of the notes.

Holders who tendered by the consent deadline are to receive payment for their notes on Feb. 25. Tenders may no longer be withdrawn.

The tender offer meanwhile continues and is scheduled to expire on March 9, subject to possible extension.

As previously announced, Comstock Resources, a Frisco, Texas-based independent energy company, said on Feb. 10 that it had begun a cash tender offer and consent solicitation for any and all its $220 million principal amount of 11¼% notes and was also soliciting noteholder consents to proposed changes in the notes' indenture that would eliminate substantially all the restrictive covenants.

It set a now-expired consent deadline of 5 p.m. ET on Feb. 24 and said the tender offer would expire at midnight ET on March 9, subject to possible extension.

The company said it would pay $1,073.47 per $1,000 principal amount to holders tendering by the consent deadline, a price which includes a $30 per $1,000 principal amount consent payment, with payment for those notes expected to be made on Feb. 25.

Holders tendering after the consent date but before the expiration of the offer would receive $1,043.47 per $1,000 principal amount but would not receive the consent payment. All tendering holders will also receive accrued interest up to, but not including, the payment date.

The company said the offer would be subject to at least a majority of the outstanding principal amount of the notes being tendered and consents delivered and subject to Comstock obtaining financing for the offer on acceptable terms (on Feb. 18, high-yield syndicate sources said Comstock had sold $175 million new 6 7/8% senior notes due 2012; the company was also lining up $400 million of new revolving credit bank financing, with a portion of the total proceeds from the bank debt and bond deals to be used to fund the tender offer and consent solicitation).

Banc of America Securities LLC (contact High Yield Special Products at 888 292-0070 or call collect 704 388-4813) is the dealer manager and solicitation agent, and Harris Nesbitt Corp. is the co-dealer manager and solicitation agent. Global Bondholder Services Corp. (866 470-4200 or call collect 212 430-3774) is the information agent.

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