EXCO buys back $41 million of 7½% notes due 2018 at 29 average in Q4

By Susanna Moon

Chicago, Feb. 8 – EXCO Resources, Inc. said it repurchased $41 million principal amount of its 7½% senior notes due Sept. 15, 2018 at an average price of 29.

EXCO made the open market purchases in the fourth quarter of 2015 with $12 million of cash, “capturing $29 million of discount to face value,” according to a company earnings release for the quarter and year ended Dec. 31.

EXCO also repurchased $551 million principal amount of 7½% notes and $277 million principal amount of EXCO’s 8½% senior notes due April 15, 2022 using proceeds of a $400 million 12½% senior secured second-lien term loan.

EXCO said it also reduced about $300 million of outstanding debt under its credit agreement using proceeds of a $300 million 12½% senior secured second-lien term loan.

The transactions reduced EXCO’s aggregate principal amount by $402 million from Sept. 30 to Dec. 31, resulting in $334 million of liquidity as of Dec. 31, the release added.

EXCO said it is evaluating more liability management transactions, including the issue of additional debt, the restructuring or repurchase of debt, issue of equity, divestitures of assets or similar transactions.

The company said it has about $125 million of third-lien capacity.

Repurchase background

EXCO said on Nov. 2 that it had reached agreement to exchange some additional notes for a 12½% five-year senior secured second-lien term loan.

The company agreed to repurchase $252 million of notes at an average price of 43% of par, and the holders of the notes will become lenders for $109 million under the second-lien term loan.

The notes to be repurchased are $175 million of the company’s 7½% senior notes due 2018, or 47%, of the $374 million outstanding, and about $76 million of its 8½% senior notes due 2022, or 26% of the $299 million outstanding.

As previously reported, the company agreed in October to repurchase about $376 million of the 7½% notes and about $201 million of the 8½% notes at an average price of 51% of par, and the noteholders agreed to become lenders under the second-lien term loan.

EXCO Resources is an oil and natural gas company based in Dallas.

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