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SM Energy begins tender offer, consent bid for 6 5/8% notes due 2019
By Susanna Moon
Chicago, May 7 – SM Energy Co. plans to repurchase or redeem its 6 5/8% senior notes due 2019 and to repay its credit facility using new issue proceeds, according to a 424B5 filing with the Securities and Exchange Commission.
The company said it began a tender offer for its $350 million outstanding principal amount of the 6 5/8% notes.
The purchase price will be $1,006.88 per $1,000 principal amount plus accrued interest up to but excluding the purchase date, the filing noted.
Holders also will receive a consent fee of $30.00 per $1,000 principal amount of notes tendered before 5 p.m. ET on May 20.
The tender offer will end on June 4.
The tender offer and consent solicitation are conditioned on the company having obtained financing with enough proceeds to fund the offer.
The offer also is conditioned on the company securing consents from holders of a majority of the outstanding notes to eliminate substantially all of the restrictive covenants and certain events of default.
If fully subscribed, the tender offer and consent solicitation will cost about $363 million, including the consent fee but excluding accrued interest of about $6 million.
The company said it may redeem any notes that remain outstanding after the tender offer.
Under the note terms, the notes may be redeemed at 103.313% of par for the 12-month period beginning Feb. 15.
The company plans to price $400 million of 10-year senior notes, with any remaining proceeds used for general corporate purposes.
As of April 29, the outstanding balance under the company’s credit facility was about $503 million.
SM is a Denver-based independent energy company.
Wells Fargo Securities, LLC is the dealer manager (contact 866 309-6316 or 704 410-4760). The information agent is D.F. King & Co., Inc. (contact 866 745-0269 or 212 269-5550 or by e-mail at sm@dfking.com).
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