Neovia exchanges 99.7% of 10%/10¾% PIK notes due 2018 for new notes

By Wendy Van Sickle

Columbus, Ohio, March 23 – Neovia Logistics, LP said it received tenders and consents from holders of $123,238,498, or about 99.7%, of the 10%/10¾% senior PIK toggle notes due 2018 issued by Neovia Logistics Intermediate Holdings, LP with Neovia Logistics Intermediate Finance Corp. as a co-issuer in an exchange offer.

The exchange offer ended at midnight at the end of March 22, after having been extended several times from an original expiry of midnight ET on Feb. 7.

Of the total tenders received, $121,661,042 were received by the early participation date of 5 p.m. ET on March 15.

The issuers had previously waived a condition requiring the valid tender of 100% of the principal amount of existing notes outstanding as of March 9.

The consideration paid for each $1,000 principal amount of existing notes accepted for exchange was $620.40 of newly issued 10%/10¾% (with adjustable step-up) senior PIK toggle notes due 2020 and $379.60 in cash, regardless of whether the tenders were submitted before or after the early date.

In addition, holders whose tendered notes were accepted for payment received, in lieu of a PIK interest payment in existing notes for accrued interest from Feb. 15 to the applicable settlement date, an equal principal amount of exchange.

Early settlement occurred on March 16 and final settlement on March 23.

Neovia said it issued a total of $77,601,233 principal amount of exchange notes and paid a total of $46,781,333.87 in cash for existing notes, including $76,604,684 of exchange notes issued and $46,182,531.56 of cash paid on the early settlement date.

The issuers offered to exchange the existing notes primarily to extend the maturity to April 1, 2020 from Feb. 1, 2018.

Cash interest on the new exchange notes will initially accrue at a rate of 10% per year, and PIK interest on the exchange notes will accrue at 10¾% per year. The interest rate will step up to 11½%/12¼% on April 1, 2018, subject to step-down adjustment based on Neovia’s total net leverage ratio. The initial interest payment on the exchange notes will be made in PIK notes, as previously reported

In addition, for the interest period from April 1, 2018 to but excluding Oct. 1, 2018 only, additional interest will accrue at a rate equal to 0.432% per year with respect to cash interest or PIK interest.

As previously reported, the company had originally offered holders two options consisting of a cash tender offer and an exchange offer for notes and cash.

As announced Feb. 15, the company scrapped the cash option in the tender and exchange.

Under the first option, which was eliminated on Feb. 22, the issuer offered to purchase up to $15 million of the existing notes for a total cash amount of $600 per $1,000 principal amount. The total payment included a $50 early participation premium for holders who tendered their notes by 5 p.m. ET on Jan. 24.

Holders under that option would not have received accrued interest for their notes.

The issuers also solicited consents to amend the existing note indenture to permit building lease obligations and receivables sales not to be treated as debt for covenant purposes. The issuers previously announced they had received sufficient consents to enact those amendments, which are now operative in respect of the remaining outstanding notes.

The offer was launched on Jan. 10.

D.F. King & Co. (800 967-5071, 212 269-5550 or dfking.com/nlih) is the exchange agent and information agent for the tender and exchange offer and consent solicitation.

Irving, Texas-based Neovia is a non-asset-based provider of service parts logistics.

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