Premier Oil convertible bond investors "unhappy" with $2.8 billion debt deal terms; threaten to scupper refinancing - sources

Premier Oil put out this rather odd statement - http://www.investegate.co.uk/Index.aspx?searchtype=2&words=Premier+Oil - this afternoon after its shares tanked over the last few days.

Clearly, the market was starting to worry about the completion of the long awaited and somewhat painstaking $2.8 billion debt refinancing deal Premier has been trying to do over the last twelve months.

So, Premier Oil looked to reassure investors, saying the company is "in the process of finalising agreement to the amended terms of its convertible bonds with additional significant bondholders who are also expected to lock up shortly".

However, according to sources familiar with the situtation some of the convertible bond investors are extremely "unhappy" with the terms they have been offered as part of the refinancing.

Last month the Financial Times reported that Premier Oil, one of the biggest independent producers of oil in the North Sea, had agreed the terms of the debt refinancing package with its lenders. A group of 40 banks account for about 85pc of the company's borrowings.

But Premier Oil also needs to get 75pc of its convertible bond holders to agree to the terms being offered otherwise the whole refinancing could collapse, according to one mole.

And I understand some of the convertible bond investors are minded not to agree to the terms because they are unhappy the banks are being offered a coupon increase while convertible bond investors aren't being offered a higher coupon.

Premier Oil declined to comment when I asked whether the company was worried about convertible bond investors scuppering the transaction by rejecting the terms of the refinancing. However, a person close to the company said: "there is no sense this is going to be tricky".

But one observer said: "they [Premier Oil and its advisers] do seem to have taken the convertible bond investors for granted and they may come to regret that."..

Date: Friday, 24 February 2017, 3:49 pm

[Disclaimer - the information on Betaville does not consitute any form of investment recommendation and is not intended to be relied upon by readers in making, or refraining from, any investment decisions].

Login to join the conversation