#Canada #Toronto #Tender Offer #Frontera Energy #7.875% Notes

Frontera Energy Initiates Tender Offer for Senior Notes

Frontera Energy Corporation (TSX: FEC), a prominent player in the oil and natural gas sector, has made headlines with its recent announcement regarding a cash tender offer. The company aims to purchase up to $65 million in aggregate principal amount of its outstanding 7.875% Senior Secured Notes, which are due in 2028. This strategic move, also coupled with a consent solicitation, reflects Frontera's proactive approach to managing its debt obligations and enhancing its financial position.

The tender offer will begin today, May 9, 2025, and is set to remain active until 5:00 PM New York City time on June 9, 2025, unless the company decides to extend this expiration date. Participants in the offer are urged to take prompt action, particularly those who wish to maximize their benefits and comply with deadlines outlined by Frontera.

Once the tender offer closes, the settlement of all notes that have been tendered by May 23, 2025, is expected around May 30, 2025. Additionally, notable existing deadlines include the Early Tender Date and Consent Deadline, which require all notes to be tendered by May 23 to secure the best consideration rates.

Details of the Offer

The primary goal of this tender offer is not only to manage existing debt but also to improve the underlying terms surrounding the notes. The company has set forth a range of financial considerations that will apply to tendered notes:

• - Maximum Tender Amount: $65 million
• - Total Consideration for Tendered Notes: $700 per $1,000 principal amount (inclusive of both tender offer and early tender payments)
• - Early Tender Payment: $50 per $1,000 principal amount for those who tender their notes before the Early Tender Date
• - Consent Payment: An additional $15 per $1,000 for those who provide consent for amendments to the governing indenture.

The Importance of the Solicitation

Holders of the notes will need to consent to certain proposed amendments to the indenture as part of the tender process. This consent is essential for the amendments to take effect and for the company's operations to continue smoothly. Frontera will only execute the proposed amendments once a majority in principal amount of the outstanding notes grants consent.

Notably, these amendments are vital for improving the company's future financing conditions and operational flexibility.

Factors to Consider

Investors and bondholders participating in the tender offer should be aware of several factors influencing their decisions:

• - Tendered notes may face a proration risk if the total amount of notes presented exceeds the maximum tender amount.
• - Withdrawable rights apply until the designated Withdrawal Deadline, allowing some flexibility for bondholders.
• - Frontera's commitment to timely notifications and transparent communication underscores its dedication to stakeholder interests.

Moreover, the company retains the discretion to adjust the terms of the offer at any time, underscoring the need for bondholders to remain engaged and informed throughout the tender process.

Company Overview

Frontera Energy Corporation is a publicly traded Canadian company. It engages in the exploration, development, production, transportation, storage, and sale of oil and natural gas, with operations predominantly across South America. The company is recognized for its commitment to responsible business practices, balancing economic growth with environmental stewardship.

In summary, Frontera Energy’s recent tender offer serves as a critical maneuver to optimize its financial structuring and address its existing note obligations.