SM Energy Company has announced the pricing of an upsized private offering of $750 million aggregate principal amount of its 6.750% senior notes due 2029 and $750 million aggregate principal amount of its 7.000% senior notes due 2032. The offering is expected to close on July 25, 2024.
The company intends to use the net proceeds from the offering, along with cash on hand and borrowings under its credit agreement, to fund the purchase price for the pending acquisition of certain oil and gas properties in the Uinta Basin from entities affiliated with XCL Resources, LLC, to redeem all of its outstanding 5.625% notes due 2025, and to pay related fees and expenses.
It's worth noting that the 2029 notes will be subject to a "special mandatory redemption" if the consummation of the XCL acquisition does not occur on or before July 1, 2025, or if the company notifies the trustee of the 2029 notes that it will not pursue the consummation of the XCL acquisition.
The notes offered will not be registered under the Securities Act of 1933, and may not be offered or sold within the United States, or to or for the account or benefit of any U.S. person, absent registration or an applicable exemption from registration requirements.
Furthermore, the press release explicitly states that it does not constitute an offer to sell, a solicitation to buy, or an offer to purchase or sell any securities. Additionally, it states that this press release is not a notice of redemption with respect to the 2025 notes.
These announcements point to an active period for SM Energy as it seeks to secure financing for acquisitions and manage its outstanding debt obligations. Today the company's shares have moved 0.9% to a price of $47.26. If you want to know more, read the company's complete 8-K report here.
