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New Enquest Retail Bond 9% Due 2027

Gilts, bonds, and interest-bearing shares
ACthelimefool
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Re: New Enquest Retail Bond 9% Due 2027

#498325

Postby ACthelimefool » May 4th, 2022, 8:55 am

Morning, I am chasing this up with AJ Bell at the moment, having had no sight of the 9's, the accrued coupon or the exchange payment, nor any sight of any update/correspondence explaining any delay to the whole process which is the most disappointing element.

ACthelimefool
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Re: New Enquest Retail Bond 9% Due 2027

#498339

Postby ACthelimefool » May 4th, 2022, 9:39 am

And the wait is over, all bonds and associated cash added to my accounts within the last 30 minutes. :D

Wozzitworthit
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Re: New Enquest Retail Bond 9% Due 2027

#498352

Postby Wozzitworthit » May 4th, 2022, 10:30 am

Same with HL - fees and credits now received in all our relevant accounts

geoffp
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Re: New Enquest Retail Bond 9% Due 2027

#498362

Postby geoffp » May 4th, 2022, 10:48 am

No reply yet from Interactive Investor but the 9%s have appeared in place of my 7%s and an exchange payment has been made amounting to a fraction over 1.5% plus 71 days interest (actual percentage paid 2.8729 compared with my calculated 2.8616).

hiriskpaul
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Re: New Enquest Retail Bond 9% Due 2027

#498411

Postby hiriskpaul » May 4th, 2022, 12:41 pm

HL Online buy/sell quotes for 10k nominal 100.6/101.466. Together with the 1.5% fee this has worked out well so far. My view now is that we will not see much change until the rest of the debt, the so called High Yield Notes, have been restructured.

I am tempted to sell a few to reduce the risk, but torn as I think they are a good investment at the current price, assuming the rest of the debt is satisfactorily dealt with.

Seasider
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Re: New Enquest Retail Bond 9% Due 2027

#498526

Postby Seasider » May 4th, 2022, 8:29 pm

In my HL account the exchange fee is called a return of capital which got me thinking about CGT. Am I right to think that as ENQ1 is a qualifying corporate bond the fee is free of CGT? I confess that in the past I have treated things like the voting fee paid on ERO1 last year as subject to CGT.

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#500212

Postby 88V8 » May 13th, 2022, 10:13 am

The 9s and the 7s have almost the same screen price.
Which is bonkers. Haven't tried to get a real price as I have no more 7s.

One almost wonders whether they could have issued more 7s but without the PIK.
Who told them they had to offer a 9% coupon?

Slow Friday musings...

V8

Gan020
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Re: New Enquest Retail Bond 9% Due 2027

#500219

Postby Gan020 » May 13th, 2022, 10:32 am

88V8 wrote:The 9s and the 7s have almost the same screen price.
Which is bonkers. Haven't tried to get a real price as I have no more 7s.

One almost wonders whether they could have issued more 7s but without the PIK.
Who told them they had to offer a 9% coupon?

Slow Friday musings...

V8


The 7's redeem in about Oct 23 and rank in the stack before the 9's which redeem in 27 unless called early.
The yield is going to be lower on the issue which redeems first.

If interest rates go to 2.5% by the summer of next year and if they had left it until then to refinance the coupon might have been nearer 10%.

I guess we pay our money and take our chance. The market will be worried about a labour government and windfall taxes if we look as far out as 2027. Plus depletion of ENQ resources and what price they might have to pay to replace them at.

Hallucigenia
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Re: New Enquest Retail Bond 9% Due 2027

#519832

Postby Hallucigenia » August 4th, 2022, 3:13 pm

hiriskpaul wrote:I don't want as big an exposure to a small highly indebted oil company for something maturing in 5 years, even if it does come with a 9% coupon.

Gan020 wrote:The 7's redeem in about Oct 23 and rank in the stack before the 9's which redeem in 27 unless called early.
The yield is going to be lower on the issue which redeems first.

If interest rates go to 2.5% by the summer of next year and if they had left it until then to refinance the coupon might have been nearer 10%.

I guess we pay our money and take our chance. The market will be worried about a labour government and windfall taxes if we look as far out as 2027. Plus depletion of ENQ resources and what price they might have to pay to replace them at.


For those that missed it, they had quite a bit to say about their debt position in their recent trading statement, they are rapidly becoming a rather less highly indebted oil company....

§ Net debt of c.$880 million at 30 June 2022 is down c.$342 million, inclusive of c.$10 million of foreign exchange movement, from 31 December 2021, driven by strong free cash flow generation
§ At the end of June, $115 million remained outstanding on the Group's senior secured debt facility ('RBL') following accelerated repayments totalling $300 million in the six months to end June 2022
§ EnQuest's net debt to EBITDA ratio as at 30 June 2022 is around 1.0x, down from 1.6x at the end of 2021.
In line with EnQuest's continued focus on deleveraging, during July, the Group has bought back and cancelled $14.4 million of its 2023 7% high yield bonds, leaving $813 million outstanding.
The Group continues to explore options to refinance its high yield bond ahead of maturity in October 2023.
§ For the period July to December 2022, the Group has hedged c.3.4 MMbbls of oil with an average floor price of c.$60/bbl and an average ceiling price of $79/bbl. For 2023, the Group has hedged a total of approximately c.3.5 MMbbls with an average floor price of c.$57/bbl and an average ceiling price of c.$77/bbl


Per their May update :
On 20 April 2022, EnQuest completed an exchange and cash offer to partially refinance its October 2023 7% GBP retail bond with an October 2027 9% GBP retail bond. The 9% bond attracted £54.0 million through the cash offer and £79.3 million through the exchange offer, which together resulted in a principal issue of £133.3 million. The exchange offer has resulted in £111.3 million of the October 2023 7% bond remaining in issue.

So they've been paying down debt at $57m per month this year, in which time they've gone from 1.6x adjusted EBITDA to 1.0x, against a target of 0.5x. All things being equal (which they never are) then they would pay off their reserves-based lending (RBL) by the end of this month. That's always a good one to get rid of as RBLs generally come with fairly stringent conditions from the banks on hedging etc. You can see that in the fact that at the results in March they had 8.6 million barrels hedged as collars at $63/$78, and as of the other day they had 6.9 million barrels at $57-60/$78-ish. In 2021 their hedging deprived them of $122m of income, and this year hedging has already cost them $142m so far.

Again all things being equal, 0.5x would imply they would be comfortable with a long-term debt of around $450m and at current rates they would get there by the end of February 2023. It won't work out like that inevitably, but it gives an idea of the timescales. And ~$160m of that has already been moved out to 2027 by you lot taking the 9% so potentially they're only looking at refinancing $300m or so of the corporate version of the 2023 7% by October 2023.

I wouldn't be so worried about depletion as they're in a reasonably good place from that POV - they did their deals before the oil price shot up, which has given them projects like Bentley to work on (and hence have lots of windfall offsets, although they have $3bn of tax losses already).

hiriskpaul
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Re: New Enquest Retail Bond 9% Due 2027

#528045

Postby hiriskpaul » September 6th, 2022, 7:02 pm

Great set of results announced, with continued debt reduction.

https://www.londonstockexchange.com/new ... t/15615470

Discussion in the Going concern disclosure on refinancing the High yield bond and remaining Retail bond next year are reassuring.

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#528164

Postby 88V8 » September 7th, 2022, 9:35 am

hiriskpaul wrote:Great set of results announced, with continued debt reduction.
Discussion in the Going concern disclosure on refinancing the High yield bond and remaining Retail bond next year are reassuring.

But the 9s are still showing screen pricing below the 7s.
Perhaps that will now change.

V8

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#531128

Postby 88V8 » September 20th, 2022, 7:54 pm

Posted here https://www.lemonfool.co.uk/viewtopic.php?p=531066#p531066 or at any rate, the foot thereof, by Hallucigenia

Friday 15:30 EnQuest PLC (ENQ)
Director/PDMR
https://www.investegate.co.uk/enquest-p ... 30057926Z/
The Amjad & Suha Bseisu Foundation is a registered charity, of which Amjad Bseisu (CEO of EnQuest PLC) is a Trustee....Exchange of £368,773 of the £1.00 notes with a fixed coupon of 7.00% maturing on 15 October 2023 for the £1.00 notes with a fixed coupon of 9.00% maturing on 27 October 2027 in accordance with the Exchange and Cash Offer Memorandum


A small expression of executive confidence.

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Gan020
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Re: New Enquest Retail Bond 9% Due 2027

#536925

Postby Gan020 » October 13th, 2022, 9:01 am

Enquest have refinanced their 2023 high yield bond today. (not ENQ1 which atm is just planned to go to maturity)

Refinanced at 11.625% if I understand correctly which compares with the 9% they paid on ENQ2 retail around 6-8 months ago. That seems about fair in the current market although a little high to my mind considering how much debt they have paid down due to high oil prices.

https://www.investegate.co.uk/enquest-p ... 00027163C/

ENQ2 is falling into alignment with this.

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#536951

Postby 88V8 » October 13th, 2022, 11:10 am

Gan020 wrote:Enquest have refinanced their 2023 high yield bond today.

Refinanced at 11.625% if I understand correctly ...ENQ2 is falling into alignment with this.

I wonder what the clip is on these.

So we now have the 7s roughly at par, the 9s at 95% if the screen price is anything to go by and presumably falling, and the new 11.625s at 98.6%.
Too bad for existing holders of the 9s if they want to get out before maturity.

V8

spasmodicus
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Re: New Enquest Retail Bond 9% Due 2027

#538601

Postby spasmodicus » October 18th, 2022, 3:04 pm

Too bad for existing holders of the 9s if they want to get out before maturity.


I've got some of those 9's (ENQ2 2027) but it seems to me a little early to be worrying about what will happen in 5 years time. As we have seen recently, rather a lot can happen in just a week. The fact that Enquest are happy to cough up 11.625% and there are takers for this is a) indicative of Enquest's confidence in their own future and b) an indication of what the markets think will happen to interest rates in the UK.

S

Hallucigenia
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Re: New Enquest Retail Bond 9% Due 2027

#538639

Postby Hallucigenia » October 18th, 2022, 4:37 pm

It's worth noting that at the rate they were DWD in H1 ($57m/month) they were on course for a happy dance to roughly coincide with the due date of the main 7% bond. Now obviously you can't rely on oil prices to stay >$100 for a year, and it's probably no bad thing to be carrying some debt to optimise capital efficiency, but it goes to show how far Enquest have come in the last few years. So I imagine Plan A was to refinance some time in Q1, but you can't blame them for looking at the way dollar interest rates were heading and refinancing early to give them some certainty in uncertain times.

It may not be perfect, but at least they have predictability for five years. You'll note that they've converted a majority of the 7% notes into a "mortgage" (RBL) secured on their oil reserves which will have a lower interest rate but will eg require hedging on a proportion of their oil output.

It's no bad thing to preserve some firepower for acquisitions and investments - the structure of the windfall tax strongly incentivises companies in the UK to make new investments with a 91% capital allowance against the windfall tax, so it's logical for them to be looking at new projects.

88V8
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Re: New Enquest Retail Bond 9% Due 2027

#541631

Postby 88V8 » October 26th, 2022, 7:00 pm

Nicked from here viewtopic.php?p=541554#p541554
Today 07:00 EnQuest PLC (ENQ)
Successful refinancing of capital structure
https://www.investegate.co.uk/enquest-p ... 00040983E/
it has successfully concluded the refinancing of its debt facilities. The Company has secured a $500.0 million reserves based lending (the "RBL") facility with a $300.0 million uncommitted accordion, maturing in April 2027, and has also completed its offering of $305.0 million aggregate principal amount of 11.625% senior notes (the "Notes") due November 2027....The Group has also reduced its net debt position as at 30 September 2022 to $750.0 million, representing a net debt to EBITDA ratio of 0.8x, demonstrating consistent reduction towards the Group's stated target of 0.5x net debt to EBITDA...We are delighted to have executed this comprehensive refinancing, which includes the successful bond issue, increased RBL and an upgrade to our credit rating from Moody's.


Good news.
And the Lemon's first accordian.

V8


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