01—Abstract
Summary
Summary of the 8-K filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Permian Resources Corporation (NYSE: PR) reported on its August 8, 2024 Form 8-K that its subsidiary, Permian Resources Operating, LLC, issued $1.0 billiona aggregate principal amount of 6.25% senior notes due February 1, 2033 on August 5, 2024.
The notes are senior unsecured obligations of the Issuer, fully and unconditionally guaranteed on a senior unsecured basis by the Issuer's current subsidiaries (other than certain immaterial, inactive subsidiaries), certain future subsidiaries, and the Company itself. Interest is payable February 1 and August 1 each year, with the first payment due February 1, 2025. The notes were issued under an indenture with Computershare Trust Company, N.A., as trustee, and include optional redemption provisions (including a make-whole premium before August 1, 2027 and redemption prices of 103.125%b, 101.563% and 100.000% for 2027, 2028 and 2029 and thereafter), a change-of-control repurchase right at 101% of principal, and customary restrictive covenants.
Concurrently with the notes offering, the Issuer commenced a tender offer for any and all of its outstanding 7.75% Senior Notes due 2026. Holders of approximately 99.57% of the $300 millionc of those notes, or $298,703,000 aggregate principal amount, validly tendered at expiration, and an additional $850,000 was tendered under guaranteed delivery procedures by August 6, 2024.
All validly tendered notes were accepted and paid on August 8, 2024. The remaining 2026 Notes will be redeemed on February 15, 2025, and the Issuer deposited $481,642.50 thousandd in trust to satisfy and discharge the 2026 Notes indenture, releasing the Issuer from most of its obligations under that indenture, subject to surviving provisions.
02—Key points
Key Highlights
- Permian Resources Operating, LLC issued $1.0 billion of 6.25% senior notes due February 1, 2033 on August 5, 2024.
- The notes are senior unsecured and guaranteed by the Issuer's current subsidiaries (other than certain immaterial, inactive ones), certain future subsidiaries, and Permian Resources Corporation.
- Interest is payable semi-annually on February 1 and August 1, with the first payment due February 1, 2025.
- Optional redemption: up to 40% of principal from certain equity offerings at 106.25% before August 1, 2027; make-whole redemption before that date; then 103.125% in 2027, 101.563% in 2028, and 100.000% in 2029 and thereafter.
- Change-of-control repurchase right at 101% of principal plus accrued interest, with a ratings decline in some cases.
- Tender offer for the 7.75% Senior Notes due 2026 drew $298,703,000 of principal (approximately 99.57%) by expiration, plus $850,000 (approximately 0.3%) under guaranteed delivery; accepted and paid August 8, 2024.
- Remaining 2026 Notes will be redeemed on February 15, 2025, with $481,642.50 thousand deposited in trust to satisfy and discharge the 2026 Notes indenture.
03—Questions
Frequently Asked Questions
What debt did Permian Resources Operating, LLC issue?
On August 5, 2024, the Issuer issued $1.0 billion aggregate principal amount of 6.25% senior notes due February 1, 2033 under an indenture with Computershare Trust Company, N.A., as trustee.
Are the new notes secured, and who guarantees them?
No, the notes are senior unsecured obligations. They are fully and unconditionally guaranteed on a senior unsecured basis by the Issuer's current subsidiaries (other than certain immaterial, inactive subsidiaries), certain future subsidiaries, and the Company, the Issuer's sole managing member and controlling equity holder.
What happened to the existing 7.75% Senior Notes due 2026?
The Issuer launched a tender offer for any and all of them alongside the new notes offering. Holders of $298,703,000 principal (approximately 99.57%) tendered by expiration, and another $850,000 (approximately 0.3%) tendered under guaranteed delivery by August 6, 2024. Those notes were paid on August 8, 2024. The remaining 2026 Notes will be redeemed on February 15, 2025, and the indenture was satisfied and discharged.
When can the Issuer redeem the 2033 notes early, and at what prices?
Before August 1, 2027, the Issuer may redeem up to 40% of principal with certain equity offering proceeds at 106.25%, and may redeem all or part at 100% plus a make-whole premium. From August 1, 2027, redemption prices are 103.125% in 2027, 101.563% in 2028, and 100.000% in 2029 and thereafter, plus accrued interest.
What protections do noteholders have?
Holders may require repurchase at 101% of principal plus accrued interest upon certain changes of control (and in some cases a ratings decline). The indenture limits debt incurrence, dividends and restricted payments, asset sales, investments, liens, restrictions on subsidiary distributions, mergers, affiliate transactions, and unrestricted subsidiaries. If an Event of Default occurs, the Trustee or holders of at least 25% of outstanding notes may accelerate the principal and accrued interest, with automatic acceleration for certain bankruptcy or insolvency events.
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