Item 8.01 Other Events.
On
· Security/Collateral: The Company's obligations under the notes will be secured
by a pledge of the equity interests in the Company's indirect wholly owned
subsidiaries
indirectly, all of the Company's upstream oil and gas assets ("Tellurian
indirectly, the assets relating to the
Holdings"). Previously, the terms of the offering had provided that the
Company's obligations under the notes would be secured by a pledge of the
equity interests in
As a new term of the offering, there will be a negative pledge on the assets of
· Additional Covenant: So long as any notes are outstanding, the Company will not
issue any common stock, or securities convertible or exchangeable into common stock, of the Company as part of a Qualified Driftwood Financing (as described below), provided that the Company may issue such securities in transactions separate from any Qualified Driftwood Financing.
· Interest Reserve: As a new term of the offering, the Company will establish an
interest reserve equal to one year (12 months) of interest payments on the notes. This interest reserve may be used to make the first two semi-annual interest payments on the notes.
· Additional Change of Control Triggering Event: Separate and apart from any
change of control with respect to the Company, if there is a change of control
at the
rating decline), each holder of the notes may require the Company to repurchase
all or a portion of its notes for cash at a price equal to 101% of the
aggregate principal amount of such notes, plus any accrued and unpaid interest,
to the date of repurchase.
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· Use of Proceeds: The Company intends to use a portion of the net proceeds from
the offering to establish the interest reserve referenced above, with remaining proceeds to be contributed to theDriftwood Project entities to support the construction of theDriftwood Project . Previously, the proposed use of proceeds did not include the establishment of an interest reserve.
· Matching of Terms: As a new term of the offering, if at any time any Qualified
Driftwood Financing (to be defined as debt for borrowed money of Driftwood
Holdings or any of its subsidiaries or disqualified stock of
or any of its subsidiaries with mandatory redemptions or similar features, in a
manner to be further agreed) is consummated with an all-in yield (or preferred
return) that exceeds an agreed-upon threshold rate, then the Company will pay
additional cash interest on the notes in an amount equal to the difference of
the all-in yield of such Qualified Driftwood Financing in excess of such
threshold rate.
In addition, the Company is discussing with the holder of all of the Company's existing 6.00% Senior Secured Convertible Notes due 2025 (the "Convertible Notes") and expects to enter into certain changes to the terms of the indenture governing the Convertible Notes in order to facilitate the offering. Such changes would include the following:
· Release of Collateral: The Convertible Notes will no longer be secured by a
pledge of the equity interests inTellurian Production Holdings and will be senior unsecured obligations of the Company.
· Partial Redemption: Concurrent with the closing of the offering, the Company
would redeem 50% of the outstanding principal amount of the Convertible Notes, together with a 20% redemption premium, for an aggregate payment of$300.0 million , a portion of which may be paid in shares of Tellurian common stock.
· Adjustment of Conversion Price: The conversion price of the Convertible Notes
would be adjusted to an amount to be determined based on a premium to the trading price of Tellurian common stock, not to exceed$5.00 per share.
· Adjustment of Redemption Right: The right of the holder of the Convertible
Notes to cause the Company to redeem the Convertible Notes on each ofMay 1, 2023 andMay 1, 2024 would be adjusted such that the amount of the redemption on each such date would be changed from 33% of the original face value of the Convertible Notes to 50% of the outstanding principal amount after the partial redemption described above, and the redemption price of any such redemptions would be increased from the principal amount of the redeemed Convertible Notes to 120% of such amount.
· No Forced Conversion: The provision of the indenture governing the Convertible
Notes providing for an automatic conversion of the Convertible Notes if the
trading price of Tellurian common stock closes above 200% of the conversion
price of the Convertible Notes for 20 consecutive trading days and certain
other conditions are satisfied would be removed.
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· Payment at Maturity: The payment to be made by the Company at the maturity of
the Convertible Notes will be increased from the then-outstanding principal amount to 120% of such amount.
· Covenants: Certain amendments to the restrictive covenants contained in the
indenture governing the Convertible Notes may be included.
The foregoing terms are still under consideration by the parties. The final amendments to the Convertible Notes, if any, may differ from those described above.
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