Gran Tierra offers note exchange, consent solicitation

Executive Summary

• Gran Tierra Energy Inc. has commenced an exchange offer to swap its outstanding 9.500% senior notes due 2029 for newly issued 9.500% senior secured notes due 2031.
• The transaction is coupled with a solicitation of consents to amend the existing indenture, specifically aiming to eliminate restrictive covenants, release collateral, and amend defined terms.
• The company will not receive cash proceeds from the issuance of the new notes; however, the transaction is contingent upon the company raising sufficient net proceeds from new indebtedness to pay cash consideration to tendering holders.

Key Details

• Exchange Terms:
  • Old Notes: 9.500% senior notes due 2029 (Cusip: 38500T AC5/U37016 AC3; ISIN: US38500TAC53/USU37016AC37).
  • New Notes: 9.500% senior secured notes due 2031.
  • Consideration for Early Participation (tendered by Feb 10, 2026): $1,000 (U.S.) aggregate principal amount per $1,000 of old notes, consisting of cash and new notes. Includes an early participation premium of $50 (U.S.).
  • Consideration for Late Participation (tendered Feb 11–27, 2026): $950 (U.S.) aggregate principal amount of new notes per $1,000 of old notes.
• Cash Consideration Structure:
  • The aggregate cash consideration ranges from $110.0 million (if 80% of notes are tendered) to $125.0 million (if 100% of notes are tendered).
  • Cash increases by $750,000 for each incremental 1.0% of notes tendered above the 80% threshold.
  • Example Scenarios:
    • If 100% tendered: ~$174.50 cash and ~$825.50 in new notes per $1,000 old note.
    • If 80% tendered: ~$191.95 cash and ~$808.05 in new notes per $1,000 old note.
• Conditions Precedent:
  • Valid receipt of consents representing not less than 66.67% of the aggregate principal amount of existing notes.
  • Valid tender of existing notes representing not less than 80% of the aggregate principal amount of existing notes.
  • Consummation of new indebtedness with net proceeds sufficient to pay the cash consideration.
• Indenture Amendments:
  • Elimination of substantially all restrictive covenants and associated events of default.
  • Release of collateral securing the existing notes.
  • Amendment of certain defined terms and covenants.
• Timeline:
  • Early Participation Deadline: 5 p.m. ET on Feb 10, 2026.
  • Withdrawal/Revocation Deadline: 5 p.m. ET on Feb 10, 2026.
  • Expiration Deadline: 5 p.m. ET on Feb 27, 2026.
  • Settlement: Early settlement date or settlement date as applicable.
• Financial Impact:
  • The company will not receive cash proceeds from the issuance of the new notes.
  • Existing notes accepted for exchange will be cancelled.
  • Accrued and unpaid interest will be paid in cash on the settlement date.