Vital Energy gives early results of tender offer, modifies caps

By Mary-Katherine Stinson

Lexington, Ky., March 28 – Vital Energy, Inc. gave the early results of its cash tender offers to purchase for cash up to $550 million aggregate principal amount of the outstanding notes from two series and also announced amendments to the offers, according to a press release.

As previously reported, the company initially offered to purchase up to $475 million of its $700,309,000 outstanding 10 1/8% senior notes due 2028 (Cusip: 516806AG1) and up to $75 million of its $500 million outstanding 9¾% senior notes due 2030 (Cusip: 516806AJ5).

The company announced that it has amended the offers to remove the 2028 notes cap and the total maximum tender amount. As a result, the company will now accept any and all 2028 notes that are tendered. The 2030 notes cap has now been increased to $100 million aggregate principal amount.

As of the early deadline of 5 p.m. ET on March 27, which is also the withdrawal deadline, Vital Energy had received tenders from registered holders of $431.15 million, or 61.57%, in aggregate principal amount of the 2028 notes, and $197,636,000, or 39.53%, in aggregate principal amount of the 2030 notes.

The total consideration per $1,000 principal amount is $1,051.88 for the 2028 notes and $1,092.50 for the 2030 notes.

The total consideration includes an early tender premium of $50 per $1,000 of notes tendered by the early tender date.

Holders tendering after the early tender date will only be eligible to receive the tender offer consideration, which is the total consideration less the early tender premium.

In addition, the company will pay accrued interest to but excluding the applicable settlement date.

As the total principal amount of 2030 notes tendered by the early date exceeded the cap, the tendered 2030 notes will be accepted for purchase at a prorated rate of 38.11%, subject to adjustment.

The tender offers are set to expire at 5 p.m. ET on April 11.

Settlement of early tendered notes is expected to occur March 29, and final settlement is expected during the week of April 1.

The tender offer is not conditioned on any minimum amount of notes being tendered but is conditioned on completion of a concurrent offering of new notes. The company intends to fund the purchase of tendered notes with the net proceeds from the concurrent offering of senior notes, together with existing corporate liquidity, if needed.

The company subsequently announced an offering of $800 million aggregate principal amount of 7 7/8% senior notes due 2032, which is scheduled to settle on March 28.

Additionally, the company announced that it intends to redeem all 2028 notes not purchased in the offers on or about April 29 at 105.063 plus accrued interest, funded with proceeds from the new offering.

BofA Securities (888 292-0070 or 980 287-6959; debt.advisory@bofa.com) will act as the dealer manager for the tender offers.

Global Bondholder Services Corp. (212 430-3774 for banks and brokers or 855 654-2014 for all others; http://www.gbsc-usa.com/vital) is the depositary and information agent.

The energy company is based in Tulsa, Okla.

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