Callon offers $300 million new 2025 notes for notes from four series

By Marisa Wong

Los Angeles, May 11 – Callon Petroleum Co. said it has begun a private offer to exchange its existing notes from four series for up to $300 million of newly issued 8% second-lien senior secured notes due 2025.

Callon is offering to exchange notes from the following series, listed in order of acceptance priority:

• $650 million outstanding 6¼% senior notes due 2023 (Cusip: 144577AH6);

• $600 million outstanding 6 1/8% senior notes due 2024 (Cusip: 13123XAT9, 13123XAU6, AN7061566);

• $250 million outstanding 8¼% senior notes due 2025 (Cusip: 144577AJ2); and

• $400 million outstanding 6 3/8% senior notes due 2026 (Cusip: 13123XAZ5).

Holders who tender their notes at or prior to 5 p.m. ET on May 22, the early tender date, will be eligible to receive $400 principal amount of new notes for each $1,000 principal amount of old notes tendered and accepted for exchange.

Holders tendering after the early tender date and at or prior to 11:59 p.m. ET on June 8, the expiration date, will be eligible to receive $350 principal amount of new notes for each $1,000 principal amount of old notes tendered for exchange.

In the event that the amount of old notes tendered would cause the maximum exchange amount to be exceeded, old notes will be accepted on a prorated basis within the applicable acceptance priority level.

In addition, the company will pay in cash accrued interest to but excluding the settlement date for the exchange offer, which is expected to be June 10.

In conjunction with the exchange offer, Callon is soliciting consents from holders of each series of existing notes to some proposed amendments to the indentures governing those notes to eliminate substantially all of the restrictive covenants and some of the default provisions.

The company must receive consents from holders representing a majority of the outstanding principal amount of each series of old notes to adopt the proposed amendments.

After the exchange offer and consent solicitations, any holders of the old notes that do not participate in the exchange offer would rank effectively junior to the new notes to the extent of the value of the collateral securing the new notes, the company noted.

Holders may not tender existing notes without delivering consents, and holders may not deliver consents without tendering their related notes.

The Rule 144A and Regulation S exchange offer is not conditioned on any minimum amount of notes being tendered or the receipt of required consents to the proposed amendments.

Tenders may be withdrawn at any time prior to 5 p.m. ET on May 22.

D.F. King & Co. (877 896-3192 or 212 269-5550 for banks and brokers or cpe@dfking.com) is the information and exchange agent.

Callon is an independent oil and natural gas company focused on the acquisition, exploration and development of assets in the oil plays of South and West Texas.

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