Summary
Diamondback Energy, Inc. (FANG) announced on January 30, 2018, the successful completion of a private placement of $300 million in aggregate principal amount of 5.375% Senior Notes due 2025. These notes were issued as additional securities under an existing indenture, effectively fungible with the previously issued notes of the same series. The offering, which closed on January 29, 2018, generated approximately $308.4 million in net proceeds after expenses. Investors should note that the primary use of these proceeds is to repay a portion of Diamondback's outstanding borrowings under its revolving credit facility. This strategic move aims to deleverage the company's balance sheet and optimize its capital structure. The transaction also included a waiver from the credit facility lenders regarding a borrowing base decrease, ensuring the company's credit capacity remained robust post-issuance. Diamondback's borrowing base remained at $1.8 billion, with elected commitments of $1.0 billion and $911.4 million in available borrowing capacity immediately after the transaction.
Key Highlights
- 1Completion of a $300 million private placement of 5.375% Senior Notes due 2025.
- 2Net proceeds of approximately $308.4 million received from the offering.
- 3Proceeds are earmarked for repaying outstanding borrowings under the company's revolving credit facility.
- 4Lenders under the revolving credit facility waived a potential borrowing base decrease triggered by the debt issuance.
- 5Diamondback's borrowing base remained $1.8 billion, with $911.4 million in available borrowing capacity post-transaction.
- 6The new notes are fungible with existing 5.375% Senior Notes due 2025.
- 7A Registration Rights Agreement was entered into, obligating Diamondback to register the new notes for resale or exchange within specific timeframes.