Cenovus offers to buy notes from two pools for up to $1.5 billion

By Marisa Wong

Los Angeles, Aug. 26 – Cenovus Energy Inc. announced it has begun tender offers to purchase for cash some of its outstanding series of notes for an aggregate purchase price, excluding accrued interest, of up to $1.5 billion, according to a Friday press release.

The notes are divided into two pools. The first pool, which includes six series of notes, is subject to a maximum aggregate purchase price of $1 billion. The maximum amount of the second pool, covering three series of notes, is $500 million.

Pool 1 tender offers

Under the first pool, Cenovus is offering to purchase notes from the following series, listed in order of acceptance priority level, for a maximum amount of $1 billion:

• $961,851,000 outstanding 4.25% notes due 2027 (Cusip: 15135UAM1, 15135UAL3, C23555AF9), with pricing to be based on the 3.125% U.S. Treasury due Aug. 31, 2027 and a fixed spread of 120 basis points;

• $750 million outstanding 4.4% notes due 2029 (Cusip: 448055AP8), with pricing to be based on the 2.75% U.S. Treasury due Aug. 15, 2032 and a fixed spread of 155 bps;

• $155,264,000 outstanding 4.45% notes due 2042 (Cusip: 15135UAH2), with pricing to be based on the 3.375% U.S. Treasury due Aug. 15, 2042 and a fixed spread of 255 bps;

• $57,726,000 outstanding 5.2% notes due 2043 (Cusip: 15135UAK5), with pricing to be based on the 3.375% U.S. Treasury due Aug. 15, 2042 and a fixed spread of 255 bps;

• $665,674,000 outstanding 5.375% notes due 2025 (Cusip: 15135UAS8), with pricing to be based on the 3.125% U.S. Treasury due Aug. 15, 2025 and a fixed spread of 70 bps; and

• $799,872,000 outstanding 5.4% notes due 2047 (Cusip: 15135UAR0, 15135UAQ2, C23555AH5), with pricing to be based on the 2.875% U.S. Treasury due May 15, 2052 and a fixed spread of 205 bps.

Pool 2 tender offers

Under the second pool, Cenovus is offering to purchase notes from the following series, listed in order of acceptance priority level, for a maximum amount of $500 million:

• $1,390,534,000 outstanding 6.75% notes due 2039 (Cusip: 15135UAF6), with pricing to be based on the 3.375% U.S. Treasury due Aug. 15, 2042 and a fixed spread of 215 bps;

• $386,773,000 outstanding 6.8% notes due 2037 (Cusip: 448055AD5), with pricing to be based on the 2.75% U.S. Treasury due Aug. 15, 2032 and a fixed spread of 250 bps; and

• $583,102,000 outstanding 5.25% notes due 2037 (Cusip: 15135UAP4), with pricing to be based on the 2.75% U.S. Treasury due Aug. 15, 2032 and a fixed spread of 215 bps.

Details

Pricing will be determined at 10 a.m. ET on Sept. 12.

The total consideration includes an early tender payment of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Sept. 9, the early tender date.

Holders tendering after the early tender date will only be eligible to receive the late tender offer consideration, which is the total consideration less the early tender payment.

Holders will also receive accrued interest up to but excluding the applicable settlement date.

The tender offers will expire at midnight ET at the end of Sept. 23.

Cenovus may choose to settle early tendered notes on an early settlement date, which is expected to be Sept. 13.

Final settlement is expected to be on Sept. 27.

Cenovus said it reserves the right, but is under no obligation, to increase or decrease either of the maximum amounts.

Tenders may be withdrawn at or prior to 5 p.m. ET on Sept. 9.

The tender offers are not conditioned on any minimum principal amount of notes being tendered but are subject to some other conditions.

Cenovus said it intends to fund the purchase of notes tendered and accepted under the offers with cash on hand and short-term borrowings.

BofA Securities, Inc. (888 292-0070 or 980 387-3907; debt_advisory@bofa.com), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3554) and Mizuho Securities USA LLC (866 271-7403 or 212 205-7736) are the lead dealer managers, and BMO Capital Markets Corp. and CIBC World Markets Corp. are the co-dealer managers for the tender offers.

D.F. King & Co., Inc. (cve@dfking.com; 212 269-5550 for banks and brokers only or 888 644-5854 for all others) is the tender and information agent.

Cenovus is a Calgary, Alta.-based oil and gas company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.