What is the purpose of the proposed $500 million notes offering?

The primary stated purpose of the offering is to repay outstanding borrowings under Diamondback's subsidiary's revolving credit facility. A portion of the proceeds may also be used for general corporate purposes, including funding part of the cash consideration for the pending acquisition of assets from Ajax Resources, LLC.

What are the terms of the Senior Notes being offered?

Diamondback proposes to offer $500.0 million aggregate principal amount of its 4.750% Senior Notes due 2024. This is being offered under an existing indenture dated October 28, 2016.

Who is eligible to purchase these Senior Notes?

The notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. They are not being registered under the Securities Act for sale to the general public in the United States.

FANG 8-K SEC Disclosure

Q: How does this offering relate to the Ajax Resources acquisition?

The offering states that a portion of the net proceeds may be used for general corporate purposes, which *may include* a portion of the cash consideration for the pending acquisition of certain assets from Ajax Resources, LLC. This suggests the debt issuance is intended to help finance that transaction.

Summary

Diamondback Energy, Inc. (FANG) announced on September 18, 2018, its intention to offer $500.0 million in aggregate principal amount of 4.750% Senior Notes due 2024. This offering, termed a "Tack-On Offering," is being conducted under an existing indenture. The primary purpose of the net proceeds from this debt issuance is to repay outstanding borrowings under its wholly-owned subsidiary's revolving credit facility. Additionally, the funds may be used for general corporate purposes, including a portion of the cash consideration for the pending acquisition of certain assets from Ajax Resources, LLC. The notes will be offered to qualified institutional buyers and certain non-U.S. persons, and are not registered under the Securities Act.

Key Highlights

1Proposed $500 million offering of 4.750% Senior Notes due 2024.
2Offering is a "Tack-On Offering" under an existing indenture.
3Proceeds intended to repay borrowings under subsidiary's revolving credit facility.
4Potential use of proceeds for general corporate purposes.
5Funds may contribute to the cash consideration for the Ajax Resources asset acquisition.
6Notes offered to qualified institutional buyers (Rule 144A) and certain non-U.S. persons (Regulation S).
7Notes are unregistered under the Securities Act.

Diamondback Energy, Inc. 8-K Report, Corporate Update (Sep 18, 2018)

Summary

Key Highlights

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