Mongolian Mining gets early tenders of $397.85 million senior notes

By Sarah Lizee

Olympia, Wash., April 9 – Mongolian Mining Corp. and indirect subsidiary Energy Resources LLC announced early results of the tender offer for a maximum amount of its $412,465,892 of outstanding guaranteed senior notes due 2022.

As of the early deadline of noon ET on April 8, holders of $397,847,706, representing 96.46% of the outstanding amount, of the notes validly tendered and did not withdraw their notes, according to a company announcement on Tuesday.

The company said it set the maximum offer amount at $397,847,706.

Holders whose senior notes were validly tendered on or before the early tender deadline will receive a total consideration of $1,050 for each $1,000 principal amount, which includes the early tender premium of $70 for each $1,000 principal amount.

The company said it also received consents from all holders who had tendered their senior notes to amend some terms of the notes, including eliminating some of the covenants, restrictive provisions and events of default. As a result, the company will enter into a supplemental indenture on April 15 to give effect to the amendments.

Mongolian Mining also announced Tuesday that as of noon ET on April 8, holders of $23,915,255, or 12.26%, of its $194,999,827 of outstanding perpetual securities validly tendered their notes. Of that amount, holders of $23,870,120 of the perpetuals, or 12.14%, were validly tendered and not withdrawn before the early deadline for the perpetuals, which was noon ET on April 1, as reported.

Holders whose perpetual securities were validly tendered on or before the early tender deadline and not withdrawn will receive the repurchase price, which includes an early tender premium of $50 for each $1,000 security.

As determined by a modified Dutch auction, the repurchase price is $510 per $1,000 security.

The company said it elected to settle both the senior notes’ and the perpetual securities’ tender offers early on April 15 and will purchase all securities validly tendered on or before the early tender deadline.

Settlement for each offer is expected for April 15.

Mongolian Mining had previously said the purpose of the tender offer for the perpetual securities is to improve the company’s financial position, and the purpose of the tender offer for the senior notes is to improve the terms of Energy Resources’ debt to enable additional flexibility necessary to grow its business in Mongolia.

The tender offers and consent solicitations are conditioned on the company issuing new guaranteed senior notes, as well as other general conditions having been satisfied or waived. The tender offer for the senior notes is also conditioned on a minimum of $275,320,982 of the senior notes being validly tendered at or prior to the expiration time, among other conditions.

Mongolian Mining sold $440 million of new 9¼% senior notes due 2024 at par on April 3, as reported by Prospect News. Proceeds from the new senior notes will be used to pay the tender price of the senior notes and perpetual securities. Any remaining proceeds will be used for general corporate purposes, including to repay debt.

J.P. Morgan Securities plc (+852 2800 7650) and Morgan Stanley & Co. International plc (+852 2239 1081 or +44 20 7677 5040) are the dealer managers and solicitation agents. D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230 or mmc@dfkingltd.com) is the information and tender agent.

Mongolian Mining is an Ulaanbaatar, Mongolia-based coking coal producer and exporter.

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