What is the primary purpose of these tender offers and consent solicitations?

Occidental Petroleum is undertaking these actions to proactively manage its debt profile, reduce outstanding debt, and potentially gain more financial flexibility by eliminating certain restrictive covenants in the governing indentures of the targeted senior notes.

How will Occidental Petroleum fund these tender offers?

The company plans to finance the cash tender offers through the proceeds obtained from a concurrent registered offering of new senior unsecured notes.

What is the significance of the 'early tender premium'?

The early tender premium is an incentive for noteholders to tender their notes by a specific deadline (December 18, 2020). Holders who meet this deadline and have their notes accepted will receive this premium in addition to the standard tender offer consideration, suggesting the company wants to secure participation and proceed with its debt management plan efficiently.

What impact could the elimination of restrictive covenants have on the company?

Eliminating restrictive covenants could provide Occidental Petroleum with greater operational and financial flexibility. These covenants often limit a company's ability to engage in certain activities, such as incurring additional debt, making asset sales, or paying dividends. Removing them could make it easier for OXY to pursue its strategic objectives and manage its business without certain pre-existing financial constraints.

OXY/OXY-WT 8-K: Regulation FD

Summary

Occidental Petroleum Corporation (OXY) announced on December 7, 2020, that it has initiated cash tender offers to repurchase up to $1.5 billion of its outstanding senior notes. This initiative aims to manage its debt structure, with a specific sub-cap for certain 2023 notes. The company plans to finance these repurchases through a concurrent offering of new senior unsecured notes. Alongside the tender offers, OXY is soliciting consents to amend the indentures governing these notes, which would remove certain restrictive covenants. This move suggests a proactive approach to debt management and potentially greater financial flexibility.

Key Highlights

1OXY launched cash tender offers to purchase up to $1.5 billion of its outstanding senior notes.
2The tender offers include a $150 million sub-cap for the 2.70% Senior Notes due 2023.
3The company intends to fund the tender offers with proceeds from a concurrent registered offering of senior unsecured notes.
4OXY is soliciting consents to amend indentures and eliminate certain restrictive covenants on the tendered notes.
5Early tender participation is incentivized with an 'early tender premium' for notes submitted by December 18, 2020.
6The tender offers will expire on January 5, 2021, unless extended or terminated.

OCCIDENTAL PETROLEUM CORP /DE/ 8-K Report, Regulation FD Disclosure (Dec 7, 2020)

Summary

Key Highlights

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