Goodrich intends to use net proceeds of the offering to pay off completely its $50 million second lien term loan, and the remainder of the proceeds to repay indebtedness outstanding under its bank revolving credit facility.
The notes will initially bear interest at a fixed rate of 3.25% per year. The notes will also bear contingent interest if the trading price of the notes reaches a specified level after December 1, 2011. Holders of the notes may, under certain circumstances at their option, convert the notes based on a base conversion rate of 15.1653 shares of common stock per $1,000 principal amount of notes, which is equivalent to a base conversion price of approximately $65.94 per share of common stock, which price represents a 50% premium above the closing price of the Company's stock on November 30, 2006. In addition, if at the time of conversion the applicable price of Goodrich Petroleum's common stock exceeds the base conversion price, holders will receive up to an additional 2.6762 shares of Goodrich Petroleum's common stock per $1,000 principal amount of notes, as determined pursuant to a specified formula. Upon conversion, Goodrich may elect to deliver the conversion value to holders in shares of common stock or a combination of cash, up to the principal amount of the notes to be converted, and stock for the remainder of the conversion value. The applicable conversion rate will be subject to customary adjustments in certain circumstances.
On or after December 1, 2011, Goodrich may redeem for cash all or a portion of the notes at a redemption price of 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to, but not including, the redemption date. Subject to certain conditions, holders may require Goodrich to purchase all or a portion of their notes on each of December 1, 2011, December 1, 2016 and December 1, 2021. In addition, if Goodrich experiences specified types of corporate transactions, holders may require Goodrich to purchase all or a portion of their notes. Any repurchase of the notes pursuant to these provisions will be for cash at a price equal to 100% of the principal amount of the notes to be purchased plus accrued and unpaid interest to the date of repurchase.
Closing of the private offering is expected to occur on December 6, 2006 and will be subject to satisfaction of various customary closing conditions.
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