Davis Polk Advises Secured Noteholders on the $2.1 Billion Restructuring of Sable Permian Resources
10/30/2019

Davis Polk advised investment funds acting as secured noteholders and backstop parties in connection with the $2.1 billion debt restructuring of Sable Permian Resources, LLC, a leading oil and natural gas extraction and production company with assets located in Texas’s Permian Basin.

The restructuring centered around a series of tender and exchange offers for the first-lien, second-lien and senior unsecured notes issued by subsidiary American Energy—Permian Basin, LLC. Pursuant to these offers, holders of first- and second-lien notes received full cash payment of all principal and interest. Unsecured noteholders received cash in an amount equal to 15% of the face amount of their pre-transaction notes, as well as warrants for a portion of the company’s equity.

In addition, funds advised by Davis Polk along with certain other investors backstopped the placement of new 12.000% secured notes due 2024 with an aggregate face amount of $708 million. Sable’s equity sponsors also contributed new equity capital of $375 million and substantially all of the company’s “holdco-level” oil and gas assets to a subsidiary in connection with the transaction.

Due to overwhelming creditor support and participation in the exchange, the company was able to avoid the need for a bankruptcy filing.

The Davis Polk restructuring team included partner Damian S. Schaible, counsel Steven Z. Szanzer and associates David Schiff, Daniel E. Meyer and Mary A. Prager. The capital markets team included partner Marcel Fausten and associates Andrew J. Terjesen and Roman Shapurko. The finance team included counsel Christian Fischer and associate Ao Chen. All members of the Davis Polk team are located in the New York office.