Exhibit 99.1
Legacy Reserves LP Announces Exchange of
$130 Million of Senior Notes for New Convertible Senior Notes
MIDLAND, Texas, September 14, 2018 / PRNewswire / — Legacy Reserves LP (“Legacy”) (NASDAQ:LGCY) today announces that Legacy, Legacy Reserves Finance Corporation (together with Legacy, the “Issuers”) and Legacy Reserves Inc. (“New Legacy”) entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of the Issuers’ 8.000% Senior Notes due 2020 (the “2020 Senior Notes”) and 6.625% Senior Notes due 2021 (the “2021 Senior Notes”), pursuant to which the Issuers will exchange (i) approximately $21 million aggregate principal amount of the 2020 Senior Notes for approximately $21 million aggregate principal amount of the Issuers’ new 8% Convertible Senior Notes due 2023 (the “New Notes”) and approximately 105,000 shares (the “Exchange Shares”) of common stock, par value $0.01, of New Legacy (“Common Stock”) and (ii) $109 million aggregate principal amount of the 2021 Senior Notes for $109 million aggregate principal amount of New Notes (collectively, the “Exchange Transactions”).
Legacy expects that the Exchange Transaction will close on September 20, 2018. The closing of the Exchange Transaction is subject to certain closing conditions, including the closing of the corporate reorganization pursuant to which Legacy will become a wholly owned subsidiary of New Legacy. The issuance of the Exchange Shares is subject to the receipt of any required consents under Legacy’s credit agreement and term loan credit agreement.
The New Notes will be convertible into shares of Common Stock of New Legacy at an initial conversion rate of 166.6667 shares per $1,000 principal amount of New Notes, which is equal to an initial conversion price of $6.00 per share of Common Stock. The New Notes may be converted in whole or in part prior to maturity, at the option of the holder.
The New Notes will be convertible, at the option of the holders, into shares of Common Stock at any time from the date of issuance up until the close of business on the earlier of (i) the business day prior to the date of a mandatory conversion notice, (ii) with respect to a New Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, if a holder exercises its right to convert on or prior to September 19, 2019, such holder will receive an early conversion payment in an amount of cash equal to the remaining scheduled payments of interest and accrued interest that would have been made on the New Notes being converted from the date of early conversion until September 19, 2019.
Subject to compliance with certain conditions, the Issuers have the right to mandatorily convert all of the New Notes if the volume weighted average price of the Common Stock equals or exceeds the conversion price for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days commencing on or after the initial issuance date.
The New Notes will be guaranteed by New Legacy, Legacy Reserves GP, LLC, the general partner of Legacy, and certain subsidiaries of Legacy.
The New Notes and the shares of New Legacy’s common stock issuable upon conversion of the New Notes, if any, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
