Canacol Energy Ltd. Announces Closing of $500 Million Private Offering of 5.75% Senior Notes

Rhea-AI Summary

Canacol Energy Ltd. has successfully completed a U.S. $500 million offering of 5.75% senior unsecured notes due 2028. The proceeds will be utilized to refinance existing 7.250% senior notes due 2025, cover related fees, refinance additional debt, and for general corporate purposes. By replacing the higher-interest 2025 notes, Canacol aims to reduce its interest costs, defer significant debt maturity by three years, and enhance liquidity for capital expenditures. The Notes are offered only to qualified institutional buyers and have not been registered under the Securities Act.

Positive

• Reduced interest rate from 7.250% to 5.75% will lower financial burden.
• Deferred maturity of significant debt by three years increases financial flexibility.
• Less restrictive covenants in the new note indenture provide operational advantages.
• Increased liquidity available for capital expenditures.

Negative

• None.

CALGARY, Alberta, Nov. 24, 2021 (GLOBE NEWSWIRE) -- Further to its news release dated November 16, 2021, Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE) (OTCQX:CNNEF) (BVC:CNEC) is pleased to announce that it has completed its previously announced offering of U.S. $500 million aggregate principal amount of 5.75% senior unsecured notes due 2028 (the “Notes”).

Canacol intends to use the proceeds of the Offering to (i) refinance its outstanding 7.250% Senior Notes due 2025 (the “2025 Notes”) pursuant to the Tender Offer and Consent Solicitation described in Canacol’s press releases dated November 8, 2021 and November 22, 2021 (the “Tender Offer”), (ii) pay the fees and expenses of the Tender Offer, (iii) to refinance certain other existing indebtedness of Canacol, and (iv) for general corporate purposes, including capital expenditures.

By replacing the 2025 Notes, Canacol will benefit from (i) replacing the 2025 Notes that bear an interest rate of 7.250% with the 2028 Notes that bear an interest rate of 5.75%; (ii) a Note indenture that will contain less restrictive covenants; (iii) deferring the maturity date of Canacol’s most significant indebtedness by three years; and (iv) additional liquidity to be used towards capital expenditures.

The Notes have been offered and sold only to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act and pursuant to certain prospectus exemptions in Canada. The Notes have not been registered under the Securities 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. 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.

About Canacol

Canacol is a natural gas exploration and production company with operations focused in Colombia. The Corporation's common stock trades on the Toronto Stock Exchange, the OTCQX in the United States of America, and the Colombia Stock Exchange under ticker symbol CNE, CNNEF, and CNE.C, respectively.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. All statements other than statements of historical fact contained in this news release may be forward-looking statements. Such statements can generally be identified by words such as "may," "target," "could," "would," "will," "should," "believe," "expect," "anticipate," "plan," "intend," "foresee" and other similar words or phrases. In particular, forward-looking statements herein include, but are not limited to, statements relating to the expectations regarding the use of proceeds of the proposed offering. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements. Canacol believes that the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements are made as of the date of this news release and Canacol assumes no obligation to update or revise them to reflect new events or circumstances, except as expressly required by applicable securities law. Further information regarding risks and uncertainties relating to Canacol and its securities can be found in the disclosure documents filed by Canacol with the securities regulatory authorities, available at www.sedar.com.

FAQ

What are the details of Canacol Energy's recent offering of senior unsecured notes (CNNEF)?

Canacol Energy announced an offering of U.S. $500 million of 5.75% senior unsecured notes due 2028, primarily to refinance existing debt and for general corporate purposes.

How will Canacol Energy use the proceeds from the note offering (CNNEF)?

The proceeds will refinance 7.250% senior notes due 2025, cover fees and expenses related to the tender offer, refinance other existing debt, and support general corporate activities.

What benefits does Canacol Energy expect from replacing its 2025 notes with the new notes (CNNEF)?

Canacol expects lower interest costs, a three-year maturity extension on significant debt, and improved liquidity for capital expenditures.

Who can purchase Canacol Energy's new senior unsecured notes (CNNEF)?

The notes are offered only to qualified institutional buyers in the U.S. and non-U.S. persons in transactions outside the United States.