What is the main purpose of these supplemental indentures?

The main purpose is to modify the terms of existing Anadarko and Kerr-McGee debt by removing most restrictive covenants and cross-default provisions. This is a crucial step for Occidental Petroleum (OXY) to integrate Anadarko's debt following its acquisition and to streamline its debt structure.

Are these changes effective immediately for all noteholders?

The supplemental indentures were effective upon execution on August 29, 2019. However, the amendments themselves (removal of covenants and cross-defaults) will only become operative and binding if Occidental Petroleum's exchange offers for the Anadarko notes are successfully completed and settled. If the exchange offers are terminated or withdrawn, the proposed amendments will not take effect.

What are the implications of removing restrictive covenants and cross-default provisions?

Removing restrictive covenants can provide OXY with greater financial flexibility regarding future business decisions, asset sales, or further debt issuance. Eliminating cross-default provisions means that a default on one specific debt instrument is less likely to trigger defaults across other debt instruments, potentially reducing systemic risk within OXY's debt portfolio.

What is the deadline for the exchange offers, and what happens if they are not completed?

The exchange offers are set to expire at 12:01 a.m. on September 13, 2019, unless extended or terminated. If the exchange offers are not completed or are withdrawn before settlement, the amendments made by the supplemental indentures will not become operative, and the original terms of the 'Old Notes Indentures' will remain in effect.

OXY 8-K: Material Agreements & Shareholder Matters

Summary

Occidental Petroleum Corporation (OXY) has entered into several supplemental indentures related to its ongoing exchange offers for Anadarko Petroleum Corporation's outstanding notes. These supplemental indentures, effective upon execution but contingent on the successful settlement of the exchange offers, significantly amend the terms of various Anadarko and Kerr-McGee notes. The primary impact of these amendments is the elimination of substantially all restrictive covenants and payment cross-default provisions within the 'Old Notes Indentures.' This move is a critical step in OXY's integration of Anadarko's debt following its acquisition. The success of these amendments is directly tied to the completion of the exchange offers, which are set to expire on September 13, 2019, unless extended or terminated.

Key Highlights

1OXY executed supplemental indentures on August 29, 2019, to amend terms of 23 series of Anadarko and Kerr-McGee notes as part of its exchange offers.
2The key change is the elimination of most restrictive covenants and cross-default provisions in the 'Old Notes Indentures,' reducing potential debt restrictions for OXY.
3These amendments are conditional upon the successful completion and settlement of OXY's exchange offers for Anadarko notes.
4The exchange offers commenced on August 15, 2019, and are scheduled to expire on September 13, 2019.
5The supplemental indentures became effective upon signing but will only become operative if the exchange offers are completed.
6The company also announced amendments to the terms of the exchange offers on August 29, 2019, via a press release.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Material Agreement (Aug 30, 2019)

Summary

Key Highlights

Frequently Asked Questions