Tuesday, October 23, 2012

"NGP Capital Resources Company Announces Organizational Changes and Recent Portfolio Activity"

Apparently, this company NGP Capital Resources owned GMX Resources notes and tendered them into the exchange.

On September 19, 2012, GMX consummated its exchange offer for its outstanding 5% Senior Convertible Notes due 2013 (the "2013 Notes"), pursuant to which holders tendering the 2013 Notes received new Senior Secured Second-Priority Notes due 2018 (the "2018 Notes") and shares of GMX common stock. The Company tendered its 2013 Notes in the exchange offer, and consequently received 2018 Notes with a face value of $12,661,000 and 3,646,368 shares of GMX common stock. The Company sold 300,000 shares of GMX common stock in September and an additional 254,000 shares in October 2012.

Interest on the 2018 Notes accrues at a rate of 9% per annum and is payable quarterly (commencing March 2, 2013) at GMX's option, in cash or, with respect to interest paid prior to September 19, 2014, either in the form of cash, GMX common stock, or a combination thereof. The number of shares of GMX stock, if any, to be issued in lieu of cash interest is calculated by assigning a value per share equal to the product of (a) 0.75 and (b) the 10-day volume weighted average price, or VWAP, ending the business day prior to the interest payment date.
Interesting to hear from someone who took part in the exchange offer (and has apparently kept most of the issued shares).


wildcat said...

NGP also lent a bunch of money to ATPG right before they went bankrupt.

Are these guys financially sophisticated enough to be able to take advantage of distressed companies like ATPG and GMXR?

. . . or have they been fooled by optimistic projections by these two companies (whose managements have consistently missed the mark)?

I think they get paid on ATPG, but its tough to tell if they are taking smart risks or just blindly reaching for yield and depending on questionable metrics to justify their lending/investments

CP said...

Which strategy is more sound?:

*Shorting stock and holding out from a distressed exchange
*Participating in a distressed exchange and keeping the shares received.