Atlas Resource Partners, L.P. Announces Amendment To Consent Solicitation For 7.75% Senior Notes

FORT WORTH, Texas, Dec. 28, 2015 /PRNewswire/ -- Atlas Resource Partners, L.P. (NYSE: ARP) ("ARP" or "the Company") announced today that the Issuers (as defined below) have amended their previously announced consent solicitation (the "7.75% Notes Consent Solicitation") for their outstanding 7.75% Senior Notes due 2021 (the "7.75% Notes") (CUSIP 049296AC0) issued by Atlas Resource Partners Holdings, LLC and Atlas Resource Finance Corporation (each individually an "Issuer" and together the "Issuers") and guaranteed by ARP and certain subsidiary guarantors, to adopt certain proposed amendments to the indenture governing the 7.75% Notes (the "7.75% Notes Indenture"), to holders of record as of December 9, 2015 (the "Record Date"), as described below.  The Issuers have been advised by certain additional significant holders that such holders will deliver consents with respect to the 7.75% Notes Consent Solicitation with the amended terms set forth below, which the Issuers believe will increase the total percentage of consenting holders to approximately 97%.

Proposed Amendments

The Issuers are now requesting consents from the holders of the 7.75% Notes to make the following amendments:

(1)  Increase the fixed dollar amount of secured indebtedness permitted to be incurred under credit facilities pursuant to the 7.75% Indenture to $1,000.0 million from $500.0 million. The Issuers originally requested consents from the holders of the 7.75% Notes to increase such fixed dollar amount to $1,050.0 million from $500.0 million. The use of secured indebtedness incurred under such basket in exchange for the 7.75% Notes or the Issuers' 9.25% Notes will be limited to a maximum amount of $100 million, and the Issuers will be required to make any offer to exchange the 7.75% Notes for secured indebtedness of the Issuers incurred under such basket to all holders of the 7.75% Notes on a pro rata basis and to make any offer to exchange the 9.25% Notes for secured indebtedness of the Issuers incurred under such basket to all holders of the 9.25% Notes on a pro rata basis. The text of this amendment to the 7.75% Indenture is set forth below:

Section 4.09 of the 7.75% Indenture is to be amended as follows:

The dollar amount in clause (a) of Section 4.09(b)(1) of the 7.75% Indenture will be changed to $1.0 billion from $500.0 million and the following proviso is to be added to the end of clause (a):  "provided, however, that no more than $100 million of Indebtedness may be Incurred pursuant to this clause (a) to refund, refinance, replace, exchange, renew, repay, extend, prepay, redeem or retire any of the Notes or any of the 9.25% Notes by the Issuers or any Subsidiary of the Issuers in consideration, in whole or in part, for secured Indebtedness of the Issuers or any Subsidiary of the Issuers and, provided, further, that (x) any offer to refund, refinance, replace, exchange, renew, repay, extend, prepay, redeem or retire any of the Notes in consideration, in whole or in part,  for secured Indebtedness of the Issuers or any Subsidiary of the Issuers Incurred pursuant to this clause (a) shall be made to all holders of the Notes on a pro rata basis and (y) any offer to refund, refinance, replace, exchange, renew, repay, extend, prepay, redeem or retire any of the 9.25% Notes in consideration, in whole or in part, for secured Indebtedness of the Issuers or any Subsidiary of the Issuers Incurred pursuant to this clause (a) shall be made to all holders of the 9.25% Notes on a pro rata basis; and, provided, further, for purposes of clarification, nothing in this paragraph shall limit the Issuers, ARP or any Subsidiary of the Issuers from purchasing the Notes or the 9.25% Notes entirely for cash."

In addition, the following definition will be added to Section 1.01 of the 7.75% Indenture:

"9.25% Notes" means the Issuers' 9.25% senior notes due 2021.

(2)  Add an additional covenant providing that ARP will not permit its consolidated senior secured interest expense to exceed the greater of $80 million in any fiscal year or 8.0% of the consolidated senior secured debt outstanding.  For the last twelve months ending September 30, 2015, consolidated senior secured interest expense for ARP was approximately $43 million.  In addition, the Issuers will add a corresponding event of default to the 7.75% Notes Indenture providing that failure to comply with such additional covenant will constitute an immediate event of default. The text of this amendment to the 7.75% Notes Indenture is set forth below:

The 7.75% Notes Indenture is to be amended to include Section 4.19 as follows:

"Section 4.19 Interest Expense.

ARP will not, as of the last day of any fiscal year for which audited financial statements have been provided pursuant to Section 4.18, permit Consolidated Senior Secured Interest Expense to exceed the Maximum Consolidated Senior Secured Interest Expense Amount.

In the event that the Issuer fails to comply with the immediately preceding sentence, the Issuers shall have the right to reduce the Consolidated Senior Secured Interest Expense, solely for purposes of determining compliance with this covenant, as of any fiscal year for such fiscal year, by the aggregate amount of the net cash proceeds actually received by ARP in a sale or issuance of, or contributions in respect of Equity Interests of ARP (any such equity contribution, a "Specified Equity Contribution") on or prior to the day that is thirty (30) days after the day on which audited financial statements are required to be delivered pursuant to Section 4.18 with respect to such fiscal year (the "Cure Expiration Date"); provided that the aggregate amount of all proceeds of Specified Equity Contributions applied pursuant to this paragraph during the term of this Indenture shall not exceed $8,000,000.  For purposes of clarification, the $8,000,000 is an aggregate cap for the entire term of the Indenture that shall be reduced by the net cash proceeds actually received from each Specified Equity Contribution and applied pursuant to this paragraph.  Notwithstanding the provisions of Article 6, neither the Trustee nor any Holder may exercise any remedies specified in this Indenture arising solely from an Event of Default resulting from a breach of this Section 4.l9 with respect to any fiscal year for a period commencing upon the date any Issuer sends an irrevocable written notice to the Trustee  (which notice must be sent within ten (10) days after the date on which audited financial statements are required to be delivered pursuant to Section 4.18) that it intends to cure non-compliance with the financial covenant included herein for such fiscal year by a Specified Equity Contribution permitted herein through the Cure Expiration Date with respect to such fiscal year.  Upon the timely receipt of the Special Equity Contribution in accordance with this provision, the proceeds from such Special Equity Contribution to be applied pursuant to this provision shall be deemed, solely for purposes of determining compliance with this covenant, to have been received in the immediately preceding fiscal year for which the Consolidated Senior Secured Interest Expense is being measured for purposes of this covenant."

In addition, the following clause (xi) will be added to Section 6.01:

"(xi)     Failure by ARP to comply with its obligations under Section 4.19."

Further, the following definitions will be added to Section 1.01 of the 7.75% Indenture:

"Adjustment Amount" means, as of any date of determination, an amount equal to (A) if the LIBO Rate is less than or equal to 200 basis points, $0 or (B) if the LIBO Rate is greater than 200 basis points, (1) the result of the difference between (a) the LIBO Rate as of such determination date and (b) 200 basis points divided by 100 multiplied by (2) the amount of Consolidated Senior Secured Debt outstanding as of such date of determination.

"Consolidated Senior Secured Interest Expense" means Consolidated Interest Expense with respect to Consolidated Senior Secured Debt.

"Consolidated Senior Secured Debt" means, as at any date of determination, the aggregate principal amount of all Indebtedness for borrowed money of ARP or any Restricted Subsidiary outstanding on such date that is secured by a Lien on any asset or property of ARP or such Restricted Subsidiary and Indebtedness of another Person that is Guaranteed by any Issuer or any Restricted Subsidiary and secured by a Lien on assets of any Issuer or any Restricted Subsidiary.

"Cure Expiration Date" has the meaning in Section 4.19.

"LIBO Rate" means, as of any date of determination, (a) the 3-month London Interbank Offered Rate as published in the Eastern Edition of the Wall Street Journal for deposits in the applicable currency as published on such day, or (b) if such rate is not available at such time for any reason, then the "LIBO Rate" for such interest period shall be such other regularly published average 3-month London Interbank Offered Rate  applicable to major commercial banks in London reasonably determined by the administrative agent under the Issuer's first lien Credit Facility in good faith.  For any day that is not a Business Day, the LIBO Rate for such day shall be the rate published on the immediately preceding Business Day.

"Maximum Consolidated Senior Secured Interest Expense Amount" means, as of any date of determination,  the sum of (A) the greater of (1) $80,000,0000 and (2) an amount equal to 8.0% of the Consolidated Senior Secured Debt outstanding as of such date, plus (B) the Adjustment Amount.

"Specified Equity Contribution" has the meaning set forth in Section 4.19.

(3) Add a prohibition with respect to certain make-whole payments. The text of this amendment will be added as Section 4.09(h) to the 7.75% Notes Indenture as set forth below:

"(h)      Any Indebtedness of ARP or any of the Restricted Subsidiaries Incurred after December 1, 2015, that contains a provision for a make-whole payment, yield maintenance payment, redemption or repayment premium, or any other premium, fee, or penalty that is payable upon the repayment, maturity or redemption of such Indebtedness (collective, a "Make Whole Premium") shall explicitly provide that such Make Whole Premium shall not be payable after and during the continuance of an event of default, upon the automatic or other acceleration of such Indebtedness prior to its stated maturity date, or after the commencement of a case with respect to the issuer of such Indebtedness under Bankruptcy Law."

Expiration Date

ARP previously announced that the Issuers extended the 7.75% Notes Consent Solicitation, which now expires at 5:00 p.m., New York City time, Tuesday, December 29, 2015, unless further extended. Except as modified as described in this press release, the terms and conditions of the 7.75% Notes Consent Solicitation remain unchanged, and holders of the 7.75% Notes should refer to the Issuers' Consent Solicitation Statement, dated December 10, 2015 (the "Consent Solicitation Statement") for more information regarding the 7.75% Notes Consent Solicitation. Currently, $375,000,000 in aggregate principal amount of the 7.75% Notes is outstanding.

9.25% Notes Consent Fee

The Company has previously announced the completion of the consent solicitation (the "9.25% Notes Consent Solicitation") for the Issuers' 9.25% Senior Notes due 2021 (the "9.25% Notes"), which expired at 5:00 p.m., New York City time, on December 17, 2015 and for which the Issuers received consents from holders of a majority of the outstanding aggregate principal amount of the 9.25% Notes to the amendments contemplated by the 9.25% Notes Consent Solicitation. However, certain holders of the 7.75% Notes who have indicated their support for the 7.75% Notes Consent Solicitation with the amended terms set forth above did not consent to the 9.25% Notes Consent Solicitation.  With the additional significant holders supporting the 7.75% Notes Consent Solicitation with the amended terms set forth above, ARP now anticipates it has the support of over 97% of the holders of the 9.25% Notes for the 9.25% Notes Consent Solicitation.  Accordingly, the Issuers have decided to pay the consent fee for the 9.25% Notes Consent Solicitation to all holders of the 9.25% Notes as of the Record Date to recognize the support of the Issuers' noteholders.

Solicitation Agent, Information Agent and Tabulation Agent

This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consents with respect to any securities. The consent solicitation is being made solely by the Issuers' Consent Solicitation Statement and is subject to the terms and conditions stated therein.

Cautionary Note Regarding Forward-Looking Statements

Certain matters discussed within this press release are forward-looking statements. Although ARP believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Forward-looking statements speak only as of the date hereof, and ARP assumes no obligation to update such statements, except as may be required by applicable law.

Atlas Resource Partners, L.P. (NYSE: ARP) is an exploration & production master limited partnership which owns an interest in over 14,500 producing natural gas and oil wells, located primarily in Appalachia, the Barnett Shale (TX), the Mississippi Lime (OK), the Eagle Ford Shale (TX), the Raton Basin (NM), Black Warrior Basin (AL) and the Rangely Field (CO). ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit our website at www.atlasresourcepartners.com (http://www.atlasresourcepartners.com), or contact Investor Relations at [email protected] (mailto:[email protected]).

Atlas Energy Group, LLC (NYSE: ATLS) is a limited liability company which owns the following interests: all of the general partner interest, incentive distribution rights and an approximate 23% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P.; the general partner interests, incentive distribution rights and limited partner interests in Atlas Growth Partners, L.P.; and a general partner interest in Lightfoot Capital Partners, an entity that invests directly in energy-related businesses and assets. For more information, please visit our website at www.atlasenergy.com (http://www.atlasenergy.com), or contact Investor Relations at [email protected] (mailto:[email protected]).

SOURCE Atlas Resource Partners, L.P.

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