Pacific seeks to hold off acceleration on debt
By Paul Kilby
NEW YORK, Feb 19 (IFR) - Pacific Exploration & Production is gathering investor consents to enter forbearance agreements on outstanding debt as it seeks to restructure its balance sheet and avoid acceleration on its debt.
The Latin America-focused E&P company said on Friday that it had reached an agreement with certain holders of its 5.375% 2019s and 5.625% 2025s to forbear from declaring the principal amounts on the notes until March 31.
The grace period on those securities ends this month after the company missed interest payments on those notes due on January 26 and January 19, respectively.
"As long as they show progress with creditors, they will avoid an acceleration of the debt," said Omar Zeolla, an analyst at Oppenheimer & Co.
The company said that it is also carrying out similar negotiations with bank lenders including HSBC and Bank of America over approximately US$1.43bn in debt.
In a bid to take over Pacific, investment firm EIG has offered to buy some US$4.1bn of Pacific's outstanding bonds.
But an ad hoc committee of creditors holding about 40% of that amount earlier expressed concerns about the tender, leaving analysts doubtful that the two parties will reach an agreement.
"(It doesn't look like) that offer is going to be successful, so management and bondholders will be looking for alternatives to that," Zeolla said. Continued...