Summary
Occidental Petroleum Corporation (OXY) announced the successful completion of a $2 billion senior notes offering on July 13, 2020. This offering comprised three tranches: $500 million in 8.000% Senior Notes due 2025, $500 million in 8.500% Senior Notes due 2027, and $1 billion in 8.875% Senior Notes due 2030. The net proceeds of approximately $1,981 million were primarily used to fund concurrent tender offers for certain existing notes and associated expenses. In conjunction with the tender offers, Occidental also executed supplemental indentures for specific existing note series. These supplemental indentures served to eliminate certain restrictive covenants and payment cross-default provisions for the 4.10% Senior Notes due 2021, Floating Rate Notes due February 2021, and 4.850% Senior Notes due 2021. This action indicates a strategic move by OXY to streamline its debt structure and potentially reduce the complexity or restrictiveness of its debt obligations related to these particular notes.
Key Highlights
- 1Occidental Petroleum raised $2 billion through a multi-tranche senior notes offering.
- 2The offering included $500M of 8.000% notes due 2025, $500M of 8.500% notes due 2027, and $1B of 8.875% notes due 2030.
- 3Net proceeds of approximately $1,981 million were used to fund tender offers for existing debt.
- 4Supplemental indentures were executed to remove certain restrictive covenants and cross-default provisions for specific older note series (4.10% 2021, Floating Rate Feb 2021, 4.850% 2021).
- 5The new notes are unsecured and carry coupon rates ranging from 8.000% to 8.875%.
- 6Interest payments on the new notes will be made semi-annually, beginning January 15, 2021.