8-KMaterial AgreementsFinancial EventsExhibits & Filings

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Mar 2, 2018)

Filed March 2, 2018For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) filed an 8-K on March 2, 2018, to announce the entry into a material definitive agreement regarding a significant debt offering. The company entered into an Underwriting Agreement to issue and sell $1 billion in aggregate principal amount of 4.20% senior notes due in 2048. These notes were offered at a public price of 99.272% of their principal amount, resulting in estimated net proceeds of approximately $983 million after accounting for underwriting discounts and expenses. The primary use of these proceeds is to refinance the repayment of $500 million in 1.50% senior notes that matured on February 15, 2018. The remaining funds will be allocated for general corporate purposes. This transaction effectively extends Occidental's debt maturity profile and lowers its overall interest expense by replacing shorter-term, lower-interest debt with longer-term, higher-interest debt.

Key Highlights

  • 1Occidental Petroleum issued $1 billion in 4.20% senior notes due 2048.
  • 2Net proceeds from the offering are approximately $983 million.
  • 3Proceeds will be used to refinance $500 million of maturing 1.50% senior notes due 2018.
  • 4Remaining proceeds will support general corporate purposes.
  • 5The offering was conducted through an Underwriting Agreement with major financial institutions.
  • 6The notes are governed by an Indenture and supplemented by an Officers' Certificate.
  • 7Covenants in the Indenture include limitations on liens, sale and leaseback transactions, and mergers/asset transfers.

Frequently Asked Questions

The primary purpose is to refinance $500 million of Occidental's 1.50% senior notes that matured on February 15, 2018. The remaining proceeds will be used for general corporate purposes.

The new notes are 4.20% senior notes due in 2048. They will bear interest at 4.20% per year, payable semi-annually on March 15 and September 15, starting September 15, 2018.

Occidental agreed to issue and sell $1 billion in aggregate principal amount of senior notes. After deducting underwriting discounts and estimated offering expenses, the net proceeds are approximately $983 million.

The Indenture governing the notes contains covenants that limit Occidental and its subsidiaries from creating liens, entering into sale and leaseback transactions, and restrict Occidental's ability to merge, consolidate, or transfer substantially all of its assets.