Gran Tierra Energy amends note exchange offer

Executive Summary

• Gran Tierra Energy Inc. has amended its previously announced exchange offer for its outstanding 9.500% senior notes due 2029, modifying the cash consideration, increasing the coupon rate of the new notes to 9.750%, and adding an amortization schedule and new collateral/guarantors.
• The company is simultaneously soliciting consents from existing note holders to amend the original indenture, which includes the elimination of restrictive covenants and the release of collateral securing the existing notes.
• The transaction is subject to strict conditions, including the receipt of consents representing at least 66-2/3% of outstanding notes and the tender of at least 80% of outstanding notes, alongside the successful incurrence of new indebtedness to fund the cash consideration.

Key Details

• Transaction Structure: Exchange of existing 9.500% senior notes due 2029 (Cusip: 38500T AC5/U37016 AC3) for newly issued 9.750% senior secured amortizing notes due 2031.
• Amended Terms:
  • Coupon Rate: Increased to 9.750%.
  • Cash Consideration: Total cash pool set at $125 million (U.S.).
  • Amortization: An amortization schedule has been added to the new notes.
  • Security: A new guarantor and collateral have been added; new notes are senior secured obligations.
  • Covenants: Certain covenants of the new notes have been modified.
• Proposed Indenture Amendments (Solicitation of Consents):
  • Elimination of substantially all restrictive covenants and associated events of default for existing notes.
  • Release of collateral securing the existing notes.
  • Amendment of certain defined terms and covenants.
• Conditions Precedent:
  • Consent Threshold: Valid receipt of consents from holders representing not less than 66-2/3% of aggregate principal amount of existing notes outstanding.
  • Exchange Threshold: Valid tender of existing notes representing not less than 80% of aggregate principal amount of existing notes outstanding (minimum exchange condition).
  • Financing Condition: Consummation of new indebtedness with net proceeds sufficient to pay the $125 million cash consideration.
• Consideration Mechanics:
  • Early Participation Deadline: Feb. 11, 2026.
  • Final Deadline: Feb. 27, 2026.
  • Pro Rata Cash Calculation: The pro rata cash portion per $1,000 tendered is determined at the early participation deadline based on total tenders.
    • Scenario A (100% Tendered): ~$174.50 cash + ~$825.50 in new notes.
    • Scenario B (80% Tendered): ~$218.12 cash + ~$781.88 in new notes.
  • Post-Deadline Tender: Holders tendering after the early participation deadline but on or before Feb. 27, 2026, receive $950 in new notes per $1,000 tendered (exchange consideration).
• Interest: Accrued and unpaid interest on existing notes will be paid in cash on the settlement date; interest ceases to accrue on the early settlement or settlement date.
• Proceeds: The company will not receive any cash proceeds from the issuance of the new notes; existing notes accepted will be cancelled.
• Regulatory/Eligibility: Offer made in the U.S. to Qualified Institutional Buyers (Rule 144A) and outside the U.S. to non-U.S. persons (Regulation S). In Canada, offered on a private placement basis to accredited investors and permitted clients.