Summary
Occidental Petroleum Corporation (OXY) has entered into a Second Amended and Restated Credit Agreement, effectively replacing its previous credit facility. This new agreement reduces the total revolving credit commitment from $5.0 billion to $4.0 billion, while importantly extending the maturity date from January 31, 2023, to June 30, 2025. This extension provides greater financial flexibility and a longer runway for the company's operations and strategic initiatives. A notable aspect of the revised credit facility is the incorporation of sustainability targets tied to interest rate margins and facility fees. Occidental's borrowing costs will be influenced by its performance in achieving absolute reductions in greenhouse gas emissions, introducing an environmental, social, and governance (ESG) component into its financing structure. The agreement also retains customary covenants, including a debt-to-capitalization ratio not exceeding 0.65 to 1.00, ensuring continued financial discipline.
Key Highlights
- 1Reduced revolving credit commitment from $5.0 billion to $4.0 billion.
- 2Extended the maturity date of the revolving credit facility from January 31, 2023, to June 30, 2025.
- 3Introduced sustainability-linked pricing, where interest rates and facility fees are adjusted based on achieving greenhouse gas emission reduction targets.
- 4Interest rate options include Adjusted Term SOFR Rate or Alternate Base Rate, plus a variable margin based on debt ratings.
- 5Facility fees will fluctuate between 12.5 and 35.0 basis points annually, also dependent on debt ratings and sustainability performance.
- 6Maintains customary covenants, including a Total Debt to Total Capitalization ratio not exceeding 0.65:1.00.
- 7The agreement was entered into on December 10, 2021, with JPMorgan Chase Bank, N.A. as the administrative agent.