Occidental Petroleum sets guidance in $1.5 billion three-part junk deal; pricing Wednesday

By Paul A. Harris

Portland, Ore., Aug. 12 – Occidental Petroleum Corp. plans to price $1.5 billion of senior notes (Ba2/BB+) in a Wednesday drive-by following a late-morning conference call with investors, according to market sources.

The deal is coming in three bullet tranches:

• Five-year notes with initial guidance in the 6% area;

• Eight-year notes with initial guidance in the 6 3/8% area; and

• 10-year notes with initial guidance in the 6 5/8% area.

Tranche sizes remain to be determined.

Pricing levels are likely to tighten prior to pricing, a high-yield bond trader said late Wednesday morning.

J.P. Morgan Securities LLC, RBC Capital Markets Corp., MUFG, SMBC Nikko Securities America Inc., BofA Securities Inc., Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., SG Americas Securities LLC and Wells Fargo Securities LLC are bookrunners for the public offering.

Senior co-managers are BBVA Securities Inc., Credit Suisse Securities (USA) LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., Standard Chartered Bank and TD Securities (USA) LLC.

Co-managers are BNP Paribas Securities Corp., CIBC World Markets Corp., Credit Agricole CIB, Mizuho Securities USA Inc. and U.S. Bancorp Investments Inc.

The Houston-based energy company plans to use the proceeds to fund a concurrent tender offer for its near-term maturities.

In a Tuesday earnings report Occidental Petroleum reported a net loss of $8.4 billion for the second quarter of 2020.

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