Deadline extended for Trinidad Petroleum bondholders

Trinidad Petroleum Holdings Ltd has extended the deadline for bondholders to exchange their bonds for new securities until today (Friday) at 5pm Eastern Standard Time (EST).

In a release yesterday, the company said that as of 5pm EST, Wednesday – the original deadline – the company had received approximately US$528.1 million of the principal amount of existing notes in the Exchange Offers. Since this exceeds $500 million, those who have tendered their notes for the exchange on or afterJune 5 will not be able to withdraw from the offer, as per the terms and conditions outlined in a press release from the company on June 6. Note holders who tendered after June 5 will also not be able to withdraw.

Since Wednesday and Thursday were public holidays in TT, the company decided to extend the deadline to ensure everyone who was interested in taking up the offer was able to do so. Since the company has crossed its threshold for the conversion it can now start the refinancing/bond reissue process. Those who have decided not to take up the offer will be paid the difference in cash.

On May 31, TPHL had announced it received US$720 million in term loans from a Cayman Islands-based syndicate of banks led by Credit Suisse for refinancing the company’s debt. The loans would be guaranteed by TPHL’s subsidiaries, Heritage Petroleum Ltd, Paria Fuel Trading Co Ltd, and Guaracara Refining Co Ltd. The new bonds will be due in 2026 and have an interest rate of 9.75 per cent. The first interest payment will be in September.

The company has been in the process of refinancing its debt, which includes these bonds, one for US$850 million due in August and a US$750 million bond in 2022, both incurred by TPHL’s predecessor Petrotrin to finance its failed gas to liquid and ultra-low sulphur diesel plants.

In a release on April 15, TPH announced an exchange programme to bondholders of the 9.75 per cent unsecured 2019 notes and six per cent 2022 notes, offering to exchange them for new 9.75 per cent secured 2026 notes. The 2019 bondholders could also exchange their notes for cash up to US$425 million, but that could be increased to US$600 million. That deadline was May 10. The company received a buy in for $130 million, leaving a difference of $720 million – the amount of the term loan.

A group of shareholders through their advisor, BroadSpan Capital had initially rejected TPHL’s offer to refinance, as they did not agree with some of the terms and conditions, but the group accepted TPHL’s amendments to the offer, including more transparency and discourse with bondholders for this new issue.

As it stands, according to the release, TPHL has received US$415,655,000, or just about 49 per cent of the outstanding notes for the 2019 bond, and US$112,476,000 or 60 per cent of the $187.5 million for the 2022 bond. (The originally issued principal amount of the 2022 notes was US$750 million.

At the launch of the Exchange Offers, those notes had been paid down to US$218,750,000, or about 30 per cent of the originally issued principal amount. Subsequently, a $31,250,000 amortisation payment made on May 8, 2019, brought the outstanding principal amount down to US$187,500,000, or approximately 25 per cent of the originally issued principal amount.)