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- Controlled Company (new) — Phoenix Equity Holdings owns 100% of the Issuer's common equity, concentrating decision-making power in a single entity.
Phoenix Energy One offers subordinated secured notes; size and price not disclosed in S-1
Filed June 2, 2026 · ~2 min read
Key Changes
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Notes are contractually subordinated to $812.3M of Senior Debt (including $525M under the Fortress Credit Agreement) and structurally subordinated to all subsidiary liabilities; in insolvency, Senior Debt must be paid in full before any payment on the Notes.
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Noteholders cannot transfer Notes without the Issuer's prior written consent, which may be granted or denied at the Issuer's sole discretion on an ad hoc basis, severely restricting liquidity.
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Payment blockage provisions prevent the Issuer from making payments on the Notes if any payment default on Senior Debt occurs or if such payment would trigger a default on Senior Debt, even if the Issuer has cash.
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Noteholders and the Trustee cannot take enforcement action while any Senior Debt remains outstanding without consent from Senior Debt holders; the Intercreditor Agreement requires noteholders to turn over any collateral proceeds to senior lenders until senior debt is fully discharged.
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The company determines collateral value and the Loan-to-Value Ratio in its sole discretion without independent third-party appraisals; no appraisal has been made in connection with this offering.
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Security interests in collateral may not be perfected at closing; security interests granted within 90 days (or one year for insiders) before a bankruptcy filing could be avoided as preferential transfers, leaving noteholders unsecured.
Summary
Phoenix Energy One is offering subordinated secured notes in an S-1 filing that does not disclose the offering size or price. The notes rank behind $812.3 million of Senior Debt, including $525 million under the Fortress Credit Agreement, and are structurally subordinated to all subsidiary liabilities. In any insolvency, Senior Debt must be paid in full before noteholders receive anything from collateral proceeds.
The offering carries multiple structural constraints that severely limit noteholder rights. Transfers require the Issuer's prior written consent at its sole discretion, eliminating liquidity. Payment blockage provisions can halt interest and principal payments if any Senior Debt default occurs.
The Intercreditor Agreement prohibits noteholders from taking enforcement action while Senior Debt remains outstanding and requires them to turn over any collateral proceeds to senior lenders. Security interests may not be perfected at closing, and the company determines collateral value in its sole discretion without independent appraisal. Phoenix Equity Holdings owns 100% of the Issuer's common equity, making this a controlled-company structure. The filing states that payment failures due to subordination provisions do not constitute a default, further limiting noteholder remedies. In bankruptcy, noteholders cannot object to cash collateral use or debtor-in-possession financing, and under-collateralized claims would be bifurcated into secured and unsecured portions, with the unsecured portion receiving no collateral benefits.
Section-by-Section Diff
Risk Factors · risk factors
Notes are contractually subordinated to $812.3M of Senior Debt and structurally subordinated to all subsidiary liabilities; holders have limited enforcement rights.
Added in current filing · verify on EDGAR →
As of March 31, 2026, $812.3 million of our outstanding indebtedness would have constituted Senior Debt, of which $525.0 million constitutes senior priority secured indebtedness under the Fortress Credit Agreement.
The Notes are contractually subordinated to $812.3 million of Senior Debt as of March 31, 2026, including $525.0 million under the Fortress Credit Agreement. In an insolvency, holders of Senior Debt must be paid in full before any payment on the Notes.
Added in current filing · verify on EDGAR →
that the Issuer may not make any payment in respect of the Notes if (a) a payment default on Senior Debt has occurred and is continuing, (b) any default or event of default under any Senior Debt would result from such payment or distribution under any covenant contained in such Senior Debt restricting payments on indebtedness, or (c) any other default occurs and is continuing on any series of Senior Debt that permits holders of that series of Senior Debt to accelerate its applicable maturity and the Trustee receives a notice of such default from the Issuer or the holders of any Senior Debt, in each case, until such default is cured or waived
The Issuer cannot make payments on the Notes if any payment default on Senior Debt occurs, if such payment would trigger a default on Senior Debt, or if any other default on Senior Debt permits acceleration. These provisions can block interest and principal payments to noteholders even if the Issuer has cash.
Added in current filing · verify on EDGAR →
that, so long as any Senior Debt remains outstanding, the holders of the Notes and the Trustee are prohibited, without the prior consent of such holders of Senior Debt, from taking any enforcement action
Noteholders and the Trustee cannot take enforcement action while any Senior Debt remains outstanding without consent from Senior Debt holders. This severely limits remedies available to noteholders in the event of default.
Added in current filing · verify on EDGAR →
Furthermore, the Fortress Credit Agreement provides for a $15.0 million tranche of loans that represents a contingent principal obligation that is only due and payable (together with accrued interest thereon) upon certain conditions occurring, including payment defaults under the Fortress Credit Agreement or a bankruptcy filing by the obligors thereunder.
The Fortress Credit Agreement includes a $15.0 million contingent tranche that becomes due upon payment defaults or bankruptcy. This represents additional Senior Debt that would rank ahead of the Notes if triggered.
Added in current filing · verify on EDGAR →
be structurally subordinated to all of the existing and future liabilities (including trade payables) and preferred equity of each of the Issuer’s subsidiaries, including Adamantium.
The Notes are structurally subordinated to all liabilities and preferred equity of the Issuer's subsidiaries, including Adamantium. This means subsidiary creditors and trade payables rank ahead of the Notes with respect to subsidiary assets, which may represent a significant portion of the Issuer's value.
Risk Factors · RISK FACTORS
Section header present but no substantive risk factors disclosed; only table of contents and boilerplate instructions appear.
Added in current filing · verify on EDGAR →
RISK FACTORS 28
The Risk Factors section header appears with a page reference (page 28) but the actual risk factor disclosures are not included in this excerpt. The section text contains only a table of contents, boilerplate reading instructions, and defined terms. Investors cannot assess company-specific risks from this excerpt.
Risk Factors · Risk Factors
Extensive indenture terms for subordinated secured notes with intercreditor restrictions, transfer limitations, and complex default/defeasance provisions.
Added in current filing · verify on EDGAR →
Under the terms of the Indenture, no holder may transfer Notes without the prior written consent of the Issuer, which may be given or rejected in the Issuer’s sole discretion and determined on an ad hoc basis.
Noteholders cannot transfer their Notes without the Issuer's prior written consent, which the Issuer may grant or deny at its sole discretion on an ad hoc basis. This severely restricts liquidity and the ability to exit the investment, as the Issuer has complete control over whether any secondary market transaction can occur.
Added in current filing · verify on EDGAR →
If the Issuer fails because of the provisions set forth above under “—Subordination” to pay the principal of and accrued unpaid interest, if any, on a Note when due, such failure shall not constitute a Default or Event of Default.
The Notes are subordinated to Senior Debt under the Indenture. If the Issuer cannot pay principal or interest on the Notes because of subordination provisions (i.e., Senior Debt holders must be paid first), that payment failure does not constitute a Default or Event of Default. This means noteholders have limited remedies when subordination blocks payment, and they stand behind Senior Debt in the payment waterfall.
Added in current filing · verify on EDGAR →
Furthermore, if the Issuer fails because of the provisions set forth under “ —Security—Intercreditor Agreement” to comply with the Loan-to-Value Ratio, such failure shall not constitute a Default or Event of Default.
The Intercreditor Agreement imposes a Loan-to-Value Ratio covenant. If the Issuer fails to comply with this ratio due to intercreditor provisions, that failure does not trigger a Default or Event of Default. This limits noteholder protections when collateral coverage deteriorates, as the intercreditor agreement constrains enforcement rights.
Added in current filing · verify on EDGAR →
Phoenix Equity Holdings, LLC, a Delaware limited liability company and the holder of 100% of the common equity interests of the Issuer.
Phoenix Equity Holdings owns 100% of the Issuer's common equity. This controlled company structure means a single entity has complete ownership and control over the Issuer, concentrating decision-making power and potentially limiting independent oversight or minority protections.
Added in current filing · verify on EDGAR →
The Issuer may not make any modification, amendment, or waiver to the Indenture or the Notes without the consent of the holders of each affected Note then outstanding (including, for the avoidance of doubt, any Notes held by Affiliates) if that modification, amendment, or waiver will (with respect to any Notes held by a non-consenting holder): reduce the percentage of the aggregate principal amount of Notes whose holders must consent to an amendment, supplement, or waiver; reduce the rate or extend the time for payment of interest (including defaulted interest) on any Note; reduce the principal of or change the Stated Maturity of any Note; waive a Default in the payment of the principal of or interest on any Note (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then-outstanding Notes and a waiver of the payment default that resulted from such acceleration); make the principal of or interest on any Note payable in currency other than that stated in such Note; or make any change to certain provisions of the Indenture relating to, among other things, the right of holders of Notes to receive payment of the principal of and interest on those Notes and to institute suit for the enforcement of any such payment and to waivers or amendments.
Most amendments to the Indenture or Notes require consent of holders of a majority in principal amount of outstanding Notes. However, certain fundamental changes (reducing payment amounts or extending payment dates, changing consent thresholds, waiving payment defaults, changing payment currency, or altering enforcement rights) require unanimous consent of all affected noteholders, including Notes held by Affiliates. This protects core economic and governance terms but means Affiliate-held Notes count toward the unanimous threshold.
MD&A · Management’s Discussion and Analysis
MD&A section discusses subordination of Notes to senior debt, intercreditor restrictions, collateral valuation risks, and bankruptcy limitations.
Added in current filing · verify on EDGAR →
The effect of this subordination is that, upon a default in payment on, or the acceleration of, any of our senior-priority secured indebtedness, including the Fortress Credit Agreement, or in the event of bankruptcy, insolvency, liquidation, dissolution, or reorganization of the Issuer, the proceeds from the sale of Collateral will be available to repay obligations on the Notes only after all obligations under the Fortress Credit Agreement and any of our other senior-priority secured indebtedness have been paid in full with the proceeds of the Collateral
The Notes are junior-lien secured debt subordinated to the Fortress Credit Agreement and other senior-priority secured debt. In any liquidation or bankruptcy, holders of the Notes receive proceeds from collateral only after senior debt is paid in full. This subordination structure means noteholders bear significantly higher loss risk than senior lenders.
Added in current filing · verify on EDGAR →
Under the Intercreditor Agreement, if at any time prior to the Discharge of First Lien Obligations holders of the Notes obtain possession of any Collateral or realize any proceeds or payment in respect of any Collateral (including funds they may receive from such Collateral pursuant to a plan of reorganization in a bankruptcy proceeding), then such holders will be obligated to hold such Collateral, proceeds, or payment in trust for the lenders under the Fortress Credit Agreement and the holders of any other senior-priority secured indebtedness and to transfer such Collateral, proceeds, or payment, as the case may be, to the representative thereof.
The Intercreditor Agreement requires noteholders to turn over any collateral proceeds they receive to senior lenders until senior debt is fully discharged. Noteholders cannot exercise remedies, credit bid, or object to senior lender actions (including unlimited debtor-in-possession financing) until senior debt is paid off. There is no assurance the Discharge of First Lien Obligations will ever occur, meaning noteholders may never be able to exercise collateral remedies.
Added in current filing · verify on EDGAR →
all calculations regarding the Loan-to-Value Ratio, including the value of the Collateral, the aggregate total discounted present value of the junior mortgages serving as Collateral, any allocable amount securing any senior-priority secured indebtedness, and the net value of any other Collateral, will be determined in good faith by us in our sole discretion, and our determination will be dispositive.
The company determines collateral value and the Loan-to-Value Ratio in its sole discretion without requiring independent third-party appraisals. The filing states no appraisal has been made in connection with this offering. The company has 60 days to cure any Loan-to-Value Ratio breach, during which time collateral value may be insufficient to cover the Notes. Collateral may be illiquid, intangible, or subject to liens and defects that reduce realizable value.
Added in current filing · verify on EDGAR →
On the date of this prospectus, certain security interests in favor of the Collateral Agent with respect to the assets initially proposed to be Collateral may not be in place. There will be no independent assurance prior to issuance of any Notes that all properties contemplated to be mortgaged as Collateral will be mortgaged
Security interests in collateral may not be perfected at closing. The filing discloses that security interests granted or perfected within 90 days (or one year for insiders) before a bankruptcy filing could be avoided as preferential transfers, leaving noteholders unsecured. There is no independent verification that mortgaged properties will actually be mortgaged or that the company holds the property interests it represents.
Added in current filing · verify on EDGAR →
In the event of a bankruptcy of the Issuer, it is possible that the bankruptcy trustee, the debtor-in-possession, or competing creditors will assert that the fair market value of the Collateral on the date of the bankruptcy filing or some other date was less than the then-current principal amount of the Notes (including after taking into account any obligations under the Fortress Credit Agreement, any future senior-priority secured indebtedness, and any parity lien indebtedness). Upon a finding by the bankruptcy court that the Notes are under-collateralized, the claims in the bankruptcy proceeding with respect to the Notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the Collateral.
If a bankruptcy court finds the Notes under-collateralized, the claim would be split into secured and unsecured portions. The unsecured portion would not receive post-petition interest, fees, expenses, or adequate protection. The Intercreditor Agreement further restricts noteholders from objecting to cash collateral use or debtor-in-possession financing, from seeking periodic cash adequate protection payments, and from contesting senior lien valuations or surcharges.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 13, 2026 · How we verify