California Resources Corporation (NYSE: CRC) has announced the pricing of its private offering of $400 million in aggregate principal amount of its 7.000% senior unsecured notes due 2034 at par. The net proceeds from the offering are estimated to be approximately $394 million after deducting the initial purchasers’ discount and estimated expenses. The company intends to use the net proceeds from this offering, together with cash on hand and borrowings under its revolving credit facility, to repay the existing indebtedness of Berry Corporation (BRY) in connection with the pending business combination with Berry (the “Berry Merger”), and pay fees and expenses in connection with the Berry Merger and the offering of the notes.
The notes will be guaranteed by all of the company’s existing subsidiaries (and certain future subsidiaries) that guarantee its revolving credit facility, its 7.125% senior unsecured notes due 2026, and its 8.250% senior unsecured notes due 2029. The offering is expected to close on October 8, 2025, subject to customary closing conditions.
It is important to note that the notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), 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.
Furthermore, California Resources Corporation disclosed that if the consummation of the Berry Merger does not occur on or before March 14, 2026 (subject to up to two three-month extensions by either the company or Berry upon written notice in certain circumstances) (the “outside date”), or if prior thereto, the company notifies the trustee in writing that the Merger Agreement related to the Berry Merger has been terminated or the company will not pursue the consummation of the Berry Merger or has determined in its sole discretion that the Berry 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 to, but excluding, the payment date of such special mandatory redemption.
It's worth highlighting that the offering of the notes is supported by forward-looking statement disclosure, and that all statements, except for statements of historical fact, made in the release regarding activities, events, or developments the company expects, believes, or anticipates will or may occur in the future, are subject to certain risks and uncertainties. The market has reacted to these announcements by moving the company's shares 2.2% to a price of $56.27. Check out the company's full 8-K submission here.
