California Resources to Offer $500 Million in Senior Unsecured Notes

California Resources Corporation (NYSE: CRC) has announced its intention to offer and sell $500 million in aggregate principal amount of senior unsecured notes due 2029. The notes will be guaranteed by all of the company’s existing subsidiaries that guarantee its revolving credit facility, its 7.125% senior unsecured notes due 2026 and certain future subsidiaries. The net proceeds from this offering, along with cash on hand and borrowings under its revolving credit facility, will be used to repay the existing indebtedness of Aera Energy, LLC and its operating affiliate Aera Energy Services Company in connection with the pending business combination with the Aera companies.

The company's press release stated that if the consummation of the Aera merger does not occur on or before May 7, 2025, or if the merger agreement related to the Aera merger has been terminated, or the company determines that the Aera merger cannot or is not reasonably likely to be consummated by the outside date, the notes will be subject to a special mandatory redemption at a redemption price equal to 100% of the initial issue price of the notes plus accrued and unpaid interest.

It's important to note that the notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the securities act and the rules promulgated thereunder and applicable state securities laws.

In terms of forward-looking statements, the company's release contained statements regarding activities, events, or developments it expects, believes, or anticipates will or may occur in the future, such as statements regarding the proposed offering, the intended use of proceeds, and the business combination with the Aera companies. The market has reacted to these announcements by moving the company's shares 0.2% to a price of $49.49. For more information, read the company's full 8-K submission here.

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