LON:PMO1^J17 | PMO1 - Premier Oil Bonds

14th Jun '17 by bsharman

2 comments 2645 reads

Does anyone own Premier Oil 5% 2018 retail bonds and can help explain to me the refinancing terms so that I can understand as i'm struggling to know what to do?

Holders are being offered either:

Equity Warrants - Holders will be entitled to subscribe for Warrant Shares at the Exercise Price (£42.75). The warrants are expected to expire 31 May 2022.

Synthetic Warrants - Holders will be entitled to receive a pro rata share of a fee calculated by reference to the change in value of the Issuer’s market capitalisation.

Currently I hold the bonds in an ISA and my broker is not able to explain to full details of the corporate action. Will the chosen warrants still be held in an ISA and will I be able to trade them?

Blimey this is complex!

All help will be very much appreciated!

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vaticinator

14th Jun '17

Hello bsharman. There is a discussion thread on the subject here

http://www.fixedincomeinvestor.co.uk/x/forum.html#/discussion/419/premier-oil-refinancing

Jeff IOM

15th Jun '17

I think that essentially they are the same. The warrants will allow you to buy the shares at the exercise price 42.76p or sell the warrants. The Synthetic Warrants will receive in cash the difference between the value of PMO recently and its value in the future. There are a couple of triggers (based on lower debt levels) or these are not met then the final date of the bonds. Then each Synthetic Warrant holder will get cash based on the increase in capitalisation (like share price) of PMO. If you only expect to get a low number of warrants the Synthetic Warrants are probably a better bet as these should pay out in cash whereas the Warrants if sold or exercised will suffer dealing costs.

Jeff

Jeff

PMO1 - Premier Oil Bonds

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Bsharman

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