PHI again extends tender for 5¼% notes as it seeks offer financing

By Susanna Moon

Chicago, Sept. 10 – PHI, Inc. again pushed out the tender for its $500 million of outstanding 5¼% senior notes due 2019 after failing to secure funding for the offer as of the previous deadline of 5 p.m. ET on Sept. 7.

As a result, the tender offer will now continue until 5 p.m. ET on Sept. 21, according to a company update on Monday.

“PHI continues to explore several alternatives to raise the requisite amount of funds to complete the tender offer. For a variety of reasons, however, PHI cannot provide any assurances that these efforts will be successful in the near term or at all,” the company reiterated on Monday.

The company had received tenders and consents for 90.53% of the 5¼% notes as of the previous offer deadline. The offer was pushed back from 5 p.m. ET on Aug. 24, 12:01 a.m. ET on July 27 and 12:01 a.m. ET on July 17.

The company said on July 27 that it had again extended the tender and that it was “exploring” raising funds “through a combination of debt and other financings.”

PHI originally planned to use a $500 million offering of five-year senior secured notes to finance the tender offer.

It then downsized the notes to $300 million and began marketing a $300 million senior secured term loan.

Subsequently the note offering was withdrawn altogether and the term loan increased to $600 million. Pricing on the loan was raised to Libor plus 750 basis points from Libor plus 700 bps.

In the company’s last announcement, PHI removed the mention of the term loan that had been present in its previous release.

With regard to the tender, the company said at the time that the financing condition remained and that it was looking at its options to secure the needed funding.

As before, the withdrawal deadline was 5 p.m. ET on June 29, which means that tendered notes cannot be withdrawn.

Under the terms of the tender, PHI will only be obligated to buy notes if it is able to complete a debt financing on satisfactory terms.

The most recent tender tally compares with tenders and consents for 90.5% of the notes as of Aug. 24; 89.6% of notes as Aug. 10; 89.32% of the notes as of July 27; 89.20% at the July 17 deadline; and 89.12% as of June 29, the early tender deadline.

As previously reported, holders who tendered their notes by the early tender deadline will receive the total purchase price of $1,001.25 per $1,000 principal amount, which includes an early tender payment of $30.00 per $1,000 principal amount.

Holders tendering after the early deadline will receive the tender offer payment of $971.25 per $1,000 principal amount, or the total amount less the early tender premium.

The company will also pay accrued interest to but excluding the settlement date.

PHI said it intends to redeem any notes not purchased under the tender offer at par.

As reported, PHI also began a related consent solicitation to amend the notes indenture to eliminate most of the restrictive covenants and some events of default contained in the indenture.

Although PHI has received the requested consents, the changes will not become operative until PHI purchases a majority of the 2019 notes.

UBS Securities LLC (888 719-4210 and 203 719-4210) is the dealer manager and solicitation agent, and D.F. King & Co., Inc. (877 297-1738) is the information and tender agent.

PHI is a Lafayette, La.-based provider of helicopter aviation services to the oil and gas sector and provider of aviation and clinical services to air medical markets.

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