Goodrich reports on convertible senior notes transaction

Goodrich Petroleum Corp.

Goodrich Petroleum Corp. (NYSE: GDP) has entered into separate, privately negotiated exchange agreements under which it will retire $109.25 million in aggregate principal amount of its outstanding 5.0% convertible senior notes due 2029 in exchange for its issuance of a new series of 5.0% convertible senior notes due 2032 in an aggregate original principal amount of $109.25 million.

The 2032 notes will mature on October 1, 2032. Following these transactions, $109.25 million in aggregate principal amount of the 2029 notes will remain outstanding with terms unchanged. The exchange is expected to close on August 26, subject to customary closing conditions.

Many terms of the 2032 notes will remain the same as the 2029 notes they replace, including the 5.0% annual cash interest rate and the conversion rate of 28.8534 shares of the company's common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $34.6580 per share of common stock), subject to adjustment in certain circumstances.

Unlike the 2029 notes, the principal amount of the 2032 notes will accrete at a rate of 2% per year commencing August 26, compounding on a semi-annual basis, until October 1, 2017. The accreted portion of the principal is payable in cash upon maturity but does not bear cash interest and is not convertible into the company's common stock. Holders have the option to require the company to purchase any outstanding 2032 notes on each of October 1, 2017, October 1, 2022 and October 1, 2027, at a price equal to 100% of the principal amount plus the accretion thereon. Accretion of principal will be reflected as a non-cash component of interest expense on the company's statement of income during the term of the 2032 notes.

Goodrich has the right to redeem the 2032 notes on or after October 1, 2016, at a price equal to 100% of the principal amount, plus accrued but unpaid interest and accretion thereon. The 2032 notes also provide the company with the option, at its election, to convert the new notes in whole or in part, prior to maturity, into the underlying common stock, provided the trading price of the company's common stock exceeds $45.06 (or 130% of the then applicable conversion price) for the required measurement period. If Goodrich elects to convert the 2032 notes on or before October 1, 2016, holders will receive a make-whole premium.

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