Exela Technologies offers to swap 11½% notes due 2026 for new notes

By Marisa Wong

Los Angeles, June 9 – Exela Technologies, Inc. announced that some of its subsidiaries began an offer on Thursday to exchange any and all of their outstanding 11½% first-priority senior secured notes due 2026 issued by Exela Intermediate LLC and Exela Finance Inc. into new 11½% first-priority senior secured notes due 2026 issued by the same issuers.

For each $1,000 principal amount of old notes tendered prior to the early tender time, holders will be eligible to receive $800 principal amount of new notes.

Holders tendering after the early deadline will only be eligible to receive $750 principal amount of new notes per $1,000 principal amount of old notes.

The early tender time is 5 p.m. ET on June 22, which is also the withdrawal deadline.

The offer will expire at 11:59 p.m. ET on July 7.

Conditions, more details

The tender offer is conditioned on, among other things, the tender of at least 66.67% in aggregate principal amount of outstanding old notes. The minimum tender condition may not be waived by the issuers.

If at least 66.67% of the old notes are tendered, the provisions containing the restrictive covenants and events of default for the old notes will be eliminated, and the collateral for the old notes will be released.

Accordingly, upon closing and settlement of the offer, all new notes will be structurally senior to the old notes with respect to the collateral. Therefore, claims with respect to the old notes will be effectively subordinated to claims with respect to the new notes and the senior facilities to the extent of the value of the collateral and, in the event of a bankruptcy, liquidation or insolvency, there would be fewer assets remaining from which the claims of the old notes could be satisfied.

Tendered old notes will not receive a cash payment for the accrued interest from the last applicable interest payment date to the settlement date. Instead, that accrued interest will be carried over to the new notes, which will accrue interest from Jan. 15.

The new notes will mature on April 15, 2026, provided that if any of the issuers’ existing notes due in 2023 or term loans due in 2023 remain outstanding on July 12, then the new notes will also mature on July 12, 2023.

Holders may not tender their old notes under the exchange offer without delivering a consent under the related consent solicitation, and holders may not deliver their consents without tendering their notes for exchange. Details of the consent solicitation were not disclosed in the press release.

No consideration will be paid for consents in the consent solicitation.

Under a support agreement entered into with several eligible holders of old notes, which, together with some of their respective affiliated funds, hold about 54.1% of the outstanding principal amount of the old notes, those holders have agreed to tender all of their notes in the exchange offer.

All old notes held by Exela and its affiliates will be tendered in the offer as well.

Holders of old notes who are either qualified institutional buyers under Rule 144A or not a U.S. person under Regulation S are eligible to participate in the tender offer and related consent solicitation.

The information agent for the offer is D. F. King & Co., Inc. (800 290-6432 or 212 269-5550; http://www.dfking.com/exela; exela@dfking.com).

Exela is an Irving, Tex.-based business process automation company.

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