THE WOODLANDS, Texas,
April 17, 2020 /PRNewswire/ -- CSI
Compressco LP ("CSI Compressco" or the "Partnership") (NASDAQ:
CCLP) and the Partnership's wholly owned subsidiary, CSI
Compressco Finance Inc. ("Finance Corp" and, together with the
Partnership, the "Issuers") today announced that they have
commenced an offer to certain Eligible Holders (as defined below)
described below to exchange any and all of their outstanding 7.250%
Senior Unsecured Notes due 2022 (the "Unsecured Notes") for newly
issued 7.500% Senior Secured First Lien Notes due 2025 (the "New
First Lien Notes") and 7.250% Senior Secured Second Lien Notes due
2027 (the "New Second Lien Notes" and, together with the New First
Lien Notes, the "New Notes"), upon the terms and conditions set
forth in the Confidential Offering Memorandum and Consent
Solicitation Statement dated April 17,
2020 (the "Exchange Offer").
The table below summarizes the principal economic terms of the
Exchange Offer.
|
|
|
|
Principal Amount
of New First Lien
Notes per $1,000 Principal Amount of
Unsecured Notes Tendered
|
|
Principal Amount
of New Second Lien
Notes per $1,000 Principal Amount of
Unsecured Notes Tendered
|
CUSIP Number
of
Unsecured Notes
|
|
Principal
Amount of
Unsecured
Notes
Outstanding
|
|
Total
Consideration if
Tendered Prior
to the Early
Tender Time
|
|
Tender
Consideration if
Tendered After the
Early Tender
Time(2)
|
|
Total
Consideration if
Tendered Prior
to the Early
Tender Time(1)
|
|
Tender
Consideration if
Tendered After the
Early Tender Time
(2)
|
20467BAB5
|
|
$295,930,000
|
|
$700
|
|
N/A
|
|
$750
|
|
$700
|
|
|
|
|
|
|
|
|
(1)
Includes the Early Tender Payment (as defined below).
|
(2)
Holders who tender after the Early Tender Time (as defined below)
will only receive New Second Lien Notes.
|
Eligible Holders that validly tender and do not validly withdraw
their Unsecured Notes in the Exchange Offer prior to 5:00 p.m., New York
City time, on April 30, 2020
(the "Early Tender Time") will receive $700 in principal amount of New First Lien Notes
or, as applicable and subject to proration as described below,
$750 principal amount of New Second
Lien Notes for each $1,000 principal
amount of Unsecured Notes tendered, which includes an "Early Tender
Payment" of $50 in principal amount
of New Notes per $1,000 principal
amount of Unsecured Notes tendered. Eligible Holders that validly
tender and do not validly withdraw their Unsecured Notes in the
Exchange Offer after the Early Tender Time will not be eligible to
receive the Early Tender Payment and will receive $700 in principal amount of New Second Lien Notes
per $1,000 principal amount of
Unsecured Notes. No New First Lien Notes will be issued to Eligible
Holders who tender their Unsecured Notes after the Early Tender
Time.
The New First Lien Notes are being offered as additional notes
under an indenture pursuant to which the Issuers issued
$350,000,000 aggregate principal
amount of 7.500% Senior Secured First Lien Notes on March 22, 2018 (the "Initial First Lien Notes").
The New First Lien Notes will have identical terms as the Initial
First Lien Notes, other than the New First Lien Notes are expected
to be issued with original issue discount for U.S. federal income
tax purposes, and the New First Lien Notes and the Initial First
Lien Notes will be treated as a single class of securities under
such indenture. Because the New First Lien Notes are expected to be
issued with original issue discount for U.S. federal income tax
purposes, the New First Lien Notes are not expected to be fungible
for trading purposes with the Initial First Lien Notes and will
trade under different CUSIP numbers.
The New First Lien Notes and the related guarantees will be
secured by a first-priority security interest in substantially all
of the Partnership's assets other than certain excluded property
and the collateral securing the Partnership's credit facility (such
collateral, the "Notes Collateral"). The New Second Lien Notes will
be secured by a second-priority security interest in the Notes
Collateral. All untendered Unsecured Notes will be effectively
junior to the New Notes and the Initial First Lien Notes as to such
Notes Collateral.
All New First Lien Notes will be issued before any New Second
Lien Notes are issued to Eligible Holders. The New Notes to be
issued in the Exchange Offer will consist of up to $50.0 million principal amount of New First Lien
Notes and up to $168.4 million of New
Second Lien Notes. We will not issue more than $50 million aggregate principal amount of New
First Lien Notes. In the event that an aggregate principal amount
of Unsecured Notes are tendered at or prior to the Early Tender
Time such that the amount of New First Lien Notes would exceed
$50 million, the amount of New First
Lien Notes issued to each tendering eligible holder who tenders at
or prior to the Early Tender Time will be determined based on the
amount of Unsecured Notes tendered by such eligible holder times a
ratio of (1) $50 million to (2) the
aggregate amount of all Unsecured Notes tendered by the Early
Tender Time and accepted by the Issuers. The portion of tendered
Unsecured Notes that are not exchanged into New First Lien Notes as
a result of any such proration will be exchanged for New Second
Lien Notes.
In conjunction with the Exchange Offer, the Issuers are
soliciting consents (the "Consent Solicitation") to eliminate
substantially all restrictive covenants and certain of the default
provisions in the indenture governing the Unsecured Notes. Holders
who tender their Unsecured Notes in the Exchange Offer will be
deemed to have submitted consents pursuant to the Consent
Solicitation. The consummation of the Exchange Offer is not subject
to, or conditioned upon, the receipt of the requisite consents or
to any minimum amount of Unsecured Notes being tendered for
exchange. The consummation of the Exchange Offer and Consent
Solicitation is subject to the satisfaction or waiver of certain
conditions set forth in the Confidential Offering Memorandum and
Consent Solicitation Statement, including completion of the ABL
Amendment (as defined in the Confidential Offering Memorandum and
Consent Solicitation Statement).
The Exchange Offer and Consent Solicitation will expire at
11:59 p.m., New York City time, on May 14, 2020, unless extended (the "Expiration
Time"). Tendered Unsecured Notes may be validly withdrawn at any
time prior to 5:00 p.m., New York City time, on April 30, 2020, but not thereafter.
Eligible Holders that validly tender Unsecured Notes prior to
the Expiration Time will also receive cash for accrued and unpaid
interest on the exchanged Unsecured Notes from the last interest
payment date to, but not including, the settlement date for the
Exchange Offer, which is expected to occur promptly after the
Expiration Time. Interest on the New Notes will accrue from (and
including) the settlement date.
Available Documents and Other Details
Documents relating to the Exchange Offer will only be
distributed to holders of Unsecured Notes who complete and
return an eligibility form confirming that they are either a
"qualified institutional buyer" under Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") or not a
"U.S. person" under Regulation S under the Securities Act (such
holders, "Eligible Holders"). Noteholders who desire to complete an
eligibility form should either visit the website for this purpose
at https://gbsc-usa.com/eligibility/compressco/ or request
instructions by sending an e-mail to contact@gbsc-usa.com or
calling Global Bondholder Services Corporation the information
agent for the Exchange Offer, at (866) 794-2200.
The New Notes will not be registered under the Securities Act,
or any other applicable securities laws and, unless so registered,
the New Notes may not be offered, sold, pledged or otherwise
transferred within the United
States or to or for the account of any U.S. person, except
pursuant to an exemption from the registration requirements
thereof. Accordingly, the New Notes are being offered and
issued only (i) to persons reasonably believed to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities
Act) and (ii) to non-"U.S. persons" who are outside the United States (as defined in Regulation S
under the Securities Act).
The complete terms and conditions of the Exchange Offer are set
forth in the informational documents relating to the Exchange
Offer. This press release is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell
the New Notes. The Exchange Offer and Consent Solicitation is only
being made pursuant to the Confidential Offering Memorandum and
Consent Solicitation Statement and the related letter of
transmittal. The Exchange Offer is not being made to holders of
Unsecured Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction.
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this press release contains
statements that are forward-looking. The words "believe," "may,"
"will," "aim," "estimate," "continue," "anticipate," "intend,"
"plan," "expect," "should" and similar expressions are intended to
identify forward-looking statements. We have based these
forward-looking statements largely on our current expectations and
projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy, short term and long-term business operations and
objectives, and financial needs. Factors that could cause
such differences in future results include, but are not limited to,
the risks described in the Confidential Offering Memorandum and
Consent Solicitation Statement related to the Exchange Offer.
About CSI Compressco LP
CSI Compressco is a provider of compression services and
equipment for natural gas and oil production, gathering, artificial
lift, transmission, processing, and storage. CSI
Compressco's compression and related services business includes a
fleet of more than 5,200 compressor packages providing
approximately 1.19 million in aggregate horsepower, utilizing a
full spectrum of low-, medium- and high-horsepower
engines. CSI Compressco also provides well monitoring
and automated sand separation services in conjunction with
compression and related services in certain Latin American
markets. CSI Compressco also designs and sells standard
compressor packages and engineered, custom-designed compressor
packages. CSI Compressco's aftermarket business provides
compressor package reconfiguration and maintenance services, as
well as the sale of compressor package parts and components
manufactured by third-party suppliers. CSI Compressco's
customers comprise a broad base of natural gas and oil exploration
and production, midstream, transmission, and storage companies
operating throughout many of the onshore producing regions of
the United States, as well as in a
number of foreign countries, including Mexico, Canada and Argentina. CSI
Compressco is managed by CSI Compressco GP Inc., which is an
indirect, wholly owned subsidiary of TETRA Technologies, Inc.
(NYSE: TTI).
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SOURCE CSI Compressco LP