Occidental (NYSE: OXY) has announced the commencement of a private exchange offer for any and all outstanding 5.000% senior notes due 2029 issued by CrownRock, L.P. and CrownRock Finance, Inc. The exchange offer is for up to $376,084,000 aggregate principal amount of new notes to be issued by Occidental and cash. This comes as a result of the partnership interest purchase agreement entered into by Occidental with CrownRock Holdings, L.P., CrownRock GP, LLC, LP Purchaser, and GP Purchaser.
The exchange offer and consent solicitation are being conducted in connection with the completion of the acquisition, and in conjunction with this, Occidental is concurrently soliciting consents to adopt certain proposed amendments to the indenture governing the CrownRock notes. The proposed amendments include eliminating restrictive covenants, events which may lead to an "event of default," reporting covenant, and other restrictions. The proposed amendments require the consent of the holders of not less than a majority in principal amount of the CrownRock notes outstanding.
The following table outlines the consent payment, exchange consideration, early participation premium, and total consideration for the CrownRock notes:
- Title of CrownRock notes: 5.000% senior notes due 2029
- CUSIP Nos.: 228701 AG3 (144A) / U22870 AF3 (Reg S)
- Maturity Date: 05/01/2029
- Principal Amount Outstanding: $376,084,000
- Consent Payment: $2.50 in cash
- Exchange Consideration: $970 principal amount of Occidental 5.000% senior notes due 2029
- Early Participation Premium: $30 principal amount of Occidental 5.000% senior notes due 2029
- Total Consideration: $1,000 principal amount of Occidental 5.000% senior notes due 2029 and $2.50 in cash
The exchange offer will expire at 5:00 p.m., New York City time, on August 16, 2024, unless extended or terminated by Occidental. The consent solicitation will expire at the early participation date.
For each $1,000 principal amount of CrownRock notes validly tendered and not validly withdrawn at or prior to the early participation date, eligible holders of CrownRock notes will be eligible to receive the total consideration, which includes a consent payment of $2.50 in cash and an early participation premium payable in principal amount of Occidental notes of $30.
The exchange offer and consent solicitation are being made pursuant to the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement dated July 19, 2024, and are conditioned upon the closing of the acquisition.
It's important to note that no accrued and unpaid interest is payable upon acceptance of any CrownRock notes in the exchange offer and consent solicitation. The interest rate, interest payment dates, maturity, and redemption terms of the Occidental notes to be issued by Occidental in the exchange offer will be the same as those of the CrownRock notes to be exchanged.
The Occidental notes offered in the exchange offer have not been registered under the Securities Act or any state securities laws. Therefore, the Occidental notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
Occidental is an international energy company with assets primarily in the United States, the Middle East, and North Africa. The company is committed to using its global leadership in carbon management to advance a lower-carbon world.
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. The exchange offer and consent solicitation is being made solely pursuant to the offering memorandum and consent solicitation statement and only to such persons and in such jurisdictions as are permitted under applicable law. Following these announcements, the company's shares moved -0.9%, and are now trading at a price of $63.13. For the full picture, make sure to review Occidental Petroleum's 8-K report.
