Iona Energy Announces Successful Completion of USD 275 Million Senior Secured Callable Bond
CALGARY, ALBERTA--(Marketwired - Sept. 17, 2013) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES
Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA), is pleased to announce the successful placing of a USD 275 million senior secured bond (the "Bond") issued by its UK subsidiary Iona Energy Company (UK) Limited (the "Issuer").
The net proceeds from the Bond issue will be used to refinance the Senior Secured Borrowing Base Facility (the "BBF") of which approximately USD 143 million is outstanding and to retire all or parts of its existing structured energy derivative transaction ("Structured Derivative Transaction"). Additional proceeds of the Bond issue are expected to enable the Company to fund the delivery of its key development projects Orlando and Kells to first oil. The Bond will provide the Company with enhanced financial flexibility through improved access to cash flow from its producing assets, Huntington and Trent & Tyne, and increased debt financing for its upcoming development expenditures, while offering general terms and conditions which are less restrictive than those of the BBF.
The Bond, which has a tenor of five years, carries an interest coupon of 9.5% payable semi-annually and will be issued at 97.5% of par. The amortization profile is tailor made to match the cash flow profile of Iona's existing asset base and is structured to enable Iona to bring Orlando, its next significant development project, on stream before commencing amortization payments. Commencing 30 months after the Settlement Date, the Bond will amortize 15% of the issue amount every six months with a 25% final payment at maturity. The amortizations will be performed at the prevailing call option prices of 105%, 104%, 104%, 103% and 103% of par value with the residual amount payable at 102% of par value. The Bond is callable at the option of the Issuer at any time.
The Bond has the usual comprehensive security package including a charge over all main assets of the Issuer including its interest in the Huntington, Trent & Tyne, Orlando and Kells fields and the shares of the Issuer and its wholly owned subsidiary Iona UK Huntington Limited, as well as a parent company guarantee. The settlement date for the Bond is expected to be September 27th, 2013 (the "Settlement Date") and is subject to final completion and execution of standard documentation. The Bond is governed under Norwegian Law and the trustee for the Bond is Norsk Tillitsmann ASA.
Neill Carson, Iona's CEO commented: "Following a ramp-up period the Huntington field reached full production capacity of 30,000 bbls/d and 27 MMcf/d in early September. With this important milestone in place the next vital step in the further development of Iona was to secure improved flexibility in its financing for the operated field development projects Orlando and Kells, which are expected to commence production in 2015 and 2016 respectively. With the successful closing of the USD 275 million Bond issue, the Company believes it is fully financed for the development of these key projects which are expected to lead to a ramp-up in production to 17,000 boe/d by year end 2016, representing more than a doubling of Iona's existing production. We are very pleased with the reception of Iona in the international bond market; through the Bond, Iona will be able to access cash flow from our producing assets and redeploy this cash flow into new projects in line with our strategy creating a self-financed and repeatable business model."
Pareto Securities acted as Sole Manager and Bookrunner of the Bond Issue.
About Iona Energy
Iona Energy is an oil and gas exploration, development and production company focused on oil and gas development in the United Kingdom's North Sea.
The securities of Iona being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
Forward-looking Statements
Some of the statements in this announcement are forward-looking, including statements regarding the terms, use of proceeds and anticipated settlement date of the Bond issue. Forward-looking statements include statements regarding the intent, belief and current expectations of Iona Energy Inc. or its officers with respect to various matters, including expected production rates of Iona's assets and expected first oil dates of Orlando and Kells. When used in this announcement, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, are based on various assumptions by Iona's management and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements, including without limitation, the risk that the Bond issue is delayed or does not settle, or the risk that operational delays impact production estimates and timing. These forward-looking statements speak only as of the date of this announcement. Iona Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
