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Breitburn suspends preferred-unit distributions, defers interest payments

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Breitburn suspends preferred-unit distributions, defers interest payments

hassuspended distributions on some preferred units and deferred interest paymentstotaling $46.7 million on certain senior notes.

The deferredinterest payments consist of about $33.5 million due April 14 on 7.875% seniornotes maturing in April 2022 and about $13.2 million on 8.625% senior notesmaturing in October 2020, the partnership said in an April 14 news release.

Under theterms of the indentures, Breitburn has 30 days after the due date to make theinterest payments before being considered in default.

An event ofdefault would also result in a cross-default under Breitburn's revolving creditfacility and its 9.25% senior secured second-lien notes due May 2020, and thetrustees under the indentures or holders of at least 25% of outstanding notesmay then accelerate repayment of the principal amounts due.

The unitsfor which Breitburn is suspending future distributions are its 8.25%series A cumulative redeemable perpetual preferred units and 8% series Bperpetual convertible preferred units.

Breitburnis using the 30-day grace period on the interest payments as it exploresstrategic alternativesto improve its balance sheet.The partnership is in talks with secured-debt holders to discuss alternativesfor its long-term capital structure, according to the news release.

LazardFrères & Co. LLC is acting as financial adviser, and Weil Gotshal &Manges LLP is acting as legal adviser for the strategic review. Jefferies LLCis providing corporate and financial advisory services.