Summary
Occidental Petroleum Corporation (OXY) announced on March 28, 2016, the execution of an Underwriting Agreement to issue and sell a significant aggregate principal amount of senior notes across three tranches: $400 million in 2.600% notes due 2022, $1.15 billion in 3.400% notes due 2026, and $1.2 billion in 4.400% notes due 2046. The total offering is valued at approximately $2.718 billion after deducting underwriting discounts and expenses. This substantial debt issuance is strategically aimed at refinancing existing, higher-interest debt obligations. Specifically, OXY plans to use the proceeds to retire $750 million of 4.125% senior notes due in June 2016 and $1.25 billion of 1.750% senior notes due in February 2017. Any remaining proceeds will be allocated for general corporate purposes. The closing of this offering is anticipated on April 4, 2016.
Key Highlights
- 1Occidental Petroleum (OXY) issued $2.75 billion in senior notes across three maturities: 2022, 2026, and 2046.
- 2The aggregate principal amount of the notes offered is $400 million (2.600% due 2022), $1.15 billion (3.400% due 2026), and $1.2 billion (4.400% due 2046).
- 3The estimated net proceeds from the offering amount to approximately $2.718 billion.
- 4The primary use of proceeds is to refinance upcoming debt maturities: $750 million in 4.125% notes due June 2016 and $1.25 billion in 1.750% notes due February 2017.
- 5The offering is expected to close on April 4, 2016, subject to customary closing conditions.
- 6The notes were issued under Occidental's automatic shelf registration statement on Form S-3.
- 7Underwriters and their affiliates may have existing relationships with Occidental, including potentially owning some of the debt being refinanced and acting as lenders under credit facilities.