Canadian Energy Company Executes a Cross-Border Tender Offer & Consent Solicitation

In May 2025, Frontera Energy Corporation (TSX: FEC) a Canadian oil and gas company, launched a cash tender offer for up to US$65 million of its US$400 million outstanding 7.875% senior secured notes due 2028, alongside a consent solicitation to amend key terms of the notes’ indenture.

The principal aim of this transaction was twofold:

1. To repurchase a portion of the notes and;
2. To secure bondholder consent for amendments that would align the indenture covenants with those of comparable issuers in the South American oil and gas sector.

These changes were intended to reduce indebtedness, support operational flexibility and streamline the company’s ability to execute future strategic transactions.

Sodali & Co's role included:

• Conducting a bondholder identification, which provided the working group with valuable insight into the investor base, allowing them to assess potential support and to better tailor the strategy for engagement.
• Working closely with the company and its advisors to review and tailor the transaction documents, focusing on the operational mechanics of the deal.
• Ensuring clarity of the procedures to maximize bondholders’ attention and participation focused on the transaction.
• Serving as a conduit of information between Frontera, the Dealer Managers – Citigroup and Itaú BBA – and the bondholders.
• Providing real-time updates and monitoring of incoming instructions through our proprietary BondWatch platform – a reporting tool that gave the company and its advisors full visibility on progress throughout the offer period.
• Assisting in identifying and raising with the working group potential critical issues that affected bondholders’ participation in the transaction.
• Curing and calculating all of the bondholder entitlements and coordinating all the operational settlement mechanics, ensuring a smooth close of the transaction.

Following feedback from certain key investors, the company made adjustments to the original terms of the offer. These changes ultimately helped secure the support necessary to reach the required consent threshold. Frontera successfully obtained the majority approval needed to implement the proposed amendments and received valid tenders exceeding the original targeted principal amount.

The successful completion of this transaction marked a significant step for Frontera, reinforcing its ability to maintain operational and financial flexibility, reduce leverage, and pursue long-term growth objectives. The company benefited from the Sodali team’s deep expertise and experience in such transactions which resulted in a smooth implementation in spite of the initial complexities faced.

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