Summary
Diamondback Energy, Inc. (FANG) has filed an 8-K detailing significant financing activities and debt management. The company successfully issued $2.2 billion in new senior notes across three tranches: $650 million of 0.900% Senior Notes due 2023, $900 million of 3.125% Senior Notes due 2031, and $650 million of 4.400% Senior Notes due 2051. This offering was made under their existing shelf registration statement and was facilitated by a large syndicate of underwriters. Concurrent with the notes offering, Diamondback also completed substantial tender offers for its own 5.375% Senior Notes due 2025 and for various QEP Resources, Inc. notes (5.375% due 2022, 5.250% due 2023, and 5.625% due 2026). The company accepted and paid for a significant portion of these tendered notes using proceeds from the new notes issuance, totaling over $2.1 billion. Additionally, Diamondback obtained the necessary consents to amend the indentures for the QEP notes, eliminating most restrictive covenants and certain events of default.
Key Highlights
- 1Issued $2.2 billion in new senior notes: $650M of 0.900% due 2023, $900M of 3.125% due 2031, and $650M of 4.400% due 2051.
- 2The new notes are senior unsecured obligations, guaranteed by Diamondback O&G LLC, but effectively subordinated to secured debt and structurally subordinated to other subsidiaries' debt.
- 3Successfully completed tender offers for approximately $367.8 million of its own 5.375% Senior Notes due 2025.
- 4Aggressively redeemed approximately $1.55 billion of QEP Resources, Inc. senior notes across three series (due 2022, 2023, and 2026) through tender offers.
- 5The aggregate purchase price for all tendered notes was approximately $2.11 billion, funded by the proceeds from the new notes offering.
- 6Obtained necessary consents to amend QEP Resources, Inc. indentures, removing substantially all restrictive covenants and certain events of default.
- 7The new notes contain customary investment grade covenants, including limitations on liens and asset sales, and a change of control provision requiring repurchase at 101% of principal.