Comstock Resources (CRK) Announces Senior Notes Exchange Amendment

August 22, 2016 5:18 PM EDT

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Comstock Resources, Inc. (NYSE: CRK) announced an amendment to its previously announced offer to exchange any and all of its existing senior notes for three new series of secured notes and, in the case of the Company's 10% Senior Secured Notes due 2020, warrants exercisable for the Company's common stock, upon the terms and subject to the conditions set forth in the Registration Statement on Form S-4 filed on August 1, 2016 with the Securities and Exchange Commission (the "SEC"), as amended and supplemented (the "Exchange Offer").

The amendment to the Exchange Offer only applies to the unsecured senior notes exchange and reflects an increase in the mandatory conversion price to $12.32 per share from $10.47 per share. The Company is also providing certain registration rights to holders of the new second lien convertible notes who would be considered an "affiliate" under securities laws. In addition, the Company is making a clarifying change to the limitation on liens covering the new convertible notes to provide that the Company will not be permitted to create or incur any liens to secure indebtedness other than permitted liens (as defined in the prospectus).

The early tender date and expiration date of the Exchange Offer continues to be on Friday, August 26, 2016 at 11:59 p.m., New York City time. Accordingly, holders who validly tender (and not withdraw) their existing notes prior to the expiration date will be eligible to receive the Early Exchange Consideration shown below.

The following table sets forth each series of outstanding notes subject to the Exchange Offer and the revised consideration offered for such series in the Exchange Offer:

Notes to be Tendered Aggregate
Principal Amount
(in millions)
Early Exchange Consideration
per $1,000 Principal Amount of Notes
Tendered by August 26, 2016
10% Senior Secured Notes due 2020 $700.0 $1,000 principal amount of Senior Secured Toggle Notes due 2020 and warrants exercisable for 2.75 shares of common stock

7.75% Senior Notes due 2019 $288.5 $1,000 principal amount of 7.75% Second Lien Convertible PIK Notes due 2019

9.5% Senior Notes due 2020 $174.6 $1,000 principal amount of 9.5% Second Lien Convertible PIK Notes due 2020

Accrued and unpaid interest on all tendered notes will be paid in cash upon closing of the Exchange Offer. The closing will occur promptly after the Expiration Date and subject to satisfaction or waiver of the closing conditions, as set forth in the registration statement, as amended and supplemented.

To validly tender their notes, the participating holders will be required to deliver a letter of transmittal and consent to certain amendments to the terms of the existing notes and related indentures that would remove certain of the covenants governing the existing senior notes and approve the release of the collateral with respect to the existing senior secured notes.

The Exchange Offer is conditioned upon among other matters (i) holders of (x) 90% of the outstanding principal amount of the existing senior secured notes and (y) 90% of the outstanding principal amount of the existing 2019 notes and 2020 notes (on a combined basis) having tendered and not validly withdrawn their old notes and (ii) completion of the Exchange Offer by September 15, 2016.

The Company will agree to pay a soliciting dealer fee equal to $5.00 for each $1,000 principal amount of old notes that are validly tendered for exchange and not validly withdrawn pursuant to the Exchange Offer to retail brokers that are appropriately designated by their clients to receive this fee, but only if the old notes of each applicable series that are tendered by or for that beneficial owner have an aggregate equivalent principal amount of $250,000 or less. Soliciting dealer fees will only be paid to retail brokers upon consummation of the Exchange Offer. No soliciting dealer fees will be paid if the Exchange Offer is not consummated, and the fees will be payable thereafter upon request by the soliciting dealers and presentation of such supporting documentation as the Company may reasonably request.

A prospectus supplement dated August 22, 2016, which describes the amendment, has been filed with the SEC. The supplement, the Company's previous supplement dated August 15, 2016 and the original prospectus may also be viewed by going to the Company's website at Prospectuses or on the SEC's website at Except as described above and as contained in the prospectus supplement, all terms and conditions of the Exchange Offer continue in effect. If you have previously tendered your existing notes, you do not need to take any further action in order to receive the benefit of the amendment.

BofA Merrill Lynch is acting as dealer manager in connection with the Exchange Offer. Holders of the notes may contact BofA Merrill Lynch at (888) 292-0070 (toll-free) or collect at (980) 388-4813 or (646) 855-2464 with any questions they may have regarding the Exchange Offer. D.F. King & Co., Inc. is serving as information and exchange agent for the Exchange Offer. You should direct questions, requests for assistance and requests for copies of the prospectus and letter of transmittal to the agent at (212) 269-5550 (for banks and brokers) or (877) 732-3619 (toll free) (all others).

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