8-KMaterial AgreementsExhibits & Filings

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Apr 1, 2016)

Filed April 1, 2016For Securities:OXYOXY-WT

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.

Frequently Asked Questions

The primary purpose of this debt issuance is to refinance existing senior notes that are maturing in June 2016 and February 2017. Occidental is aiming to replace higher-interest rate debt with new notes, potentially reducing future interest expenses and managing its debt maturity profile.

Occidental Petroleum agreed to issue and sell a total aggregate principal amount of $2.75 billion in senior notes. After deducting underwriting discounts and estimated offering expenses, the net proceeds are expected to be approximately $2.718 billion.

The new notes consist of three tranches: $400 million of 2.600% senior notes due 2022, $1.15 billion of 3.400% senior notes due 2026, and $1.2 billion of 4.400% senior notes due 2046.

While the filing doesn't explicitly detail risks, investors should consider general risks associated with bond investments, such as interest rate risk (bond prices fall when interest rates rise), credit risk (the risk that the issuer may default), and liquidity risk. The prospectus supplement, referenced but not fully included here, would typically contain a detailed risk factors section.