Frontera Announces Closing of Offering of U.S.$400 Million 7.875% Senior Unsecured Notes Due 2028
//NOT FOR DISSEMINATION TO U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES//
TORONTO, June 21, 2021 /CNW/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company"), announced today that it completed its previously announced offering of U.S.$400 million in senior unsecured notes due 2028 at a coupon rate of 7.875% (the "Notes").
Gabriel de Alba, Chairman of the Board of Directors, commented:
"The overwhelming success of this offering demonstrates the confidence the global capital markets have in Frontera's strategy and their support of management to execute it. The Company's refinancing process attracted high quality institutional investors who recognized the Company's focus on a strong credit profile and sustainable balance sheet. Looking ahead, Frontera will remain committed to delivering value-focused production and cash flow from across our proven and diverse asset base while continuing to drive costs out of the system, improving efficiencies and operating in an ethically, socially and environmentally responsible way."
Orlando Cabrales, Chief Executive Officer of Frontera, commented:
"This has been an important few weeks for Frontera as we re-engaged with the global bond market investor community. Through the completion of this financing, we lowered our coupon from 9.7% to 7.875%, negotiated a significantly improved covenant and guarantors package, increased the size of the bond from $350 to $400 million, extended our debt maturity profile to seven years, and successfully priced a multiple times oversubscribed offering that attracted high quality investors. I would like to thank Frontera's Management team for their efforts in delivering such a successful result."
This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
The Notes have not been registered under the U.S. Securities Act of 1993, as amended (the "Act"), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Notes were offered exclusively to qualified institutional buyers in the United States pursuant to Rule 144A under the Act, to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Act, pursuant to certain prospectus exemptions in Canada and certain exemptions from registration requirements in other jurisdictions.
Based on publicly available information, The Catalyst Capital Group Inc. manages funds (the "Catalyst Funds") that hold approximately 35.8% of the common shares of the Company. Frontera understands that the Catalyst Funds have subscribed for and purchased US$8,000,000 principal amount of Notes. As a result of the equity holdings of the Catalyst Funds, the purchase of Notes by the Catalyst Funds is a "related party transaction" of the Company as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators ("MI 61-101"). The purchase will be exempt from the valuation and minority approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(a) of MI 61-101, respectively. The material change report to be filed by the Company in connection with the closing of the offering will contain additional disclosure required under MI 61-101. In addition, the closing of the offering of the Notes is subject to the final approval of the Toronto Stock Exchange.
About Frontera:
Frontera Energy Corporation is a Canadian public Company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 39 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.
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Advisories:
Cautionary Note Concerning Forward-Looking Statements
This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, the execution of the Company's Strategy and obtaining approval from the Toronto Stock Exchange) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: expected impact of the refinancing on the Company's strategy ; volatility in market prices for oil and natural gas (including as a result of a sustained low oil price environment due to the COVID-19 pandemic and the actions of OPEC and non-OPEC countries and the restrictions imposed by governments in response thereto); the duration and spread of the COVID-19 pandemic and its severity; the success of the Company's program to manage COVID-19; uncertainties associated with estimating and establishing oil and natural gas reserves and resources; liabilities inherent with the exploration, development, exploitation and reclamation of oil and natural gas; the Company's ability to access additional financing; the ability of the Company to: meet its financial obligations and minimum commitments, fund capital expenditures and comply with covenants contained in the agreements that govern indebtedness; political developments in the countries where the Company operates; the uncertainties involved in interpreting drilling results and other geological data; geological, technical, drilling and processing problems and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 3, 2021 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE Frontera Energy Corporation
Brent Anderson, Director, Investor Relations, 1 403 705 8827, [email protected], www.fronteraenergy.ca
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