Summary
Occidental Petroleum Corporation (OXY) has entered into a $4.7 billion Term Loan Agreement, finalized on December 28, 2023. This financing is structured into two tranches: a $2.0 billion 364-day senior unsecured term loan and a $2.7 billion two-year senior unsecured term loan. The primary purpose of these facilities is to fund a portion of the cash consideration for Occidental's previously announced acquisition of CrownRock, L.P., as well as to refinance certain debt of CrownRock and cover related expenses. Investors should note that the loan's interest rates are variable, tied to either Term SOFR or the Alternate Base Rate, plus an applicable margin that fluctuates based on Occidental's long-term debt ratings. The agreement includes standard covenants and events of default, with a specific requirement for Occidental to maintain a Total Debt to Total Capitalization ratio not exceeding 0.65 to 1.00. This filing details the financial commitments made to support a significant strategic acquisition.
Key Highlights
- 1Occidental Petroleum entered into a $4.7 billion Term Loan Agreement on December 28, 2023.
- 2The financing is composed of a $2.0 billion 364-day senior unsecured term loan and a $2.7 billion two-year senior unsecured term loan.
- 3Proceeds are designated to fund the acquisition of CrownRock, L.P., refinance Target debt, and cover associated fees and expenses.
- 4Interest rates are variable, based on Term SOFR or Alternate Base Rate plus a margin tied to OXY's credit ratings.
- 5The agreement includes customary covenants, such as a negative pledge clause.
- 6A key financial covenant requires Occidental to maintain a Total Debt to Total Capitalization ratio of 0.65:1.00 or less.