Occidental launches, upsizes tender offers, seeks consent for notes

By Sarah Lizee

Olympia, Wash., Aug. 12 – Occidental Petroleum Corp. launched offers to purchase for cash up to $3 billion of eight series its outstanding senior notes and launched related consent solicitations, according to a press release.

The tender offer was increased from $1.5 billion late on Wednesday on the heels of a Wednesday morning launch of the offers and then a subsequent pricing of $3 billion of notes in three tranches, an offering that was doubled from an expected $1.5 billion.

The following notes are included in the offers, listed in order of acceptance priority level:

• $305,294,000 of 4.1% senior notes due 2021 (Cusip: 674599BY0) for a total consideration of $1,007.50 per $1,000 of notes;

• $1,449,371,000 2.6% senior notes due 2021 (Cusip: 674599CU7) for a total consideration of $1,005 per $1,000 of notes;

• $500 million floating-rate notes due August 2021 (Cusip: 674599CV5) for a total consideration of $980 per $1,000 of notes;

• $813.69 million of 3.125% senior notes due 2022 (Cusip: 674599CC7) for a total consideration of $1,000 per $1,000 of notes;

• $400 million of 2.6% senior notes due 2022 (Cusip: 674599CK9) for a total consideration of $987.50 per $1,000 of notes;

• $2 billion of 2.7% senior notes due 2022 (Cusip: 674599CP8) for a total consideration of $992.50 per $1,000 of notes;

• $1.5 billion of floating-rate notes due August 2022 (Cusip: 674599CQ6) for a total consideration of $960 per $1,000 of notes;

• $1,190,720,000 of 2.7% senior notes due 2023 (Cusip: 674599CE3) for a total consideration of $967.50 per $1,000 of notes.

Holders will also receive accrued interest.

The total consideration for each series of notes includes an early tender premium of $50 per $1,000 of notes. Holders of notes that are validly tendered at or prior to 5 p.m. ET on Aug. 25 and accepted for purchase will receive the early tender premium.

The maximum purchase price to be paid by Occidental for the 2022 notes, excluding accrued interest, will be limited to $700 million (upsized from an initial $200 million), and the maximum purchase price for the 2.7% 2023 notes, excluding accrued interest, will be limited to $50 million.

The tender offers will expire at 11:59 p.m. ET on Sept. 9.

Notes that have been tendered may be withdrawn prior to 5 p.m. ET on Aug. 25.

Acceptance for tenders of notes may be subject to proration.

As part of the tender offers, Occidental is also soliciting consents from the holders of the 2.6% 2021 notes, floating-rate August 2021 notes, 3.125% 2022 notes, 2.6% 2022 notes, 2.7% 2022 notes, floating-rate August 2022 notes and 2.7% 2023 notes for certain proposed amendments that would, among other things, remove some covenants contained in the indentures governing the consent notes.

Each holder tendering consent notes under the tender offers must also deliver a consent to the proposed amendments. Holders may not deliver consents without also tendering their consent notes.

The tender offers are not conditioned on the tender of any minimum principal amount of notes, the consummation of any other tender offer or obtaining any requisite consent. However, Occidental’s obligation to accept for purchase tendered notes is subject to the satisfaction or waiver of a number of conditions, including the completion by Occidental of a registered offering of senior debt securities that results in net proceeds of at least $2,950,000,000, higher than the initially announced $1,475,000,000.

The lead dealer managers and lead solicitation agents are J.P. Morgan Securities LLC (866 834-4666, 212 834-2045), RBC Capital Markets, LLC (877 381-2099, 212 618-7843), MUFG Securities Americas Inc. (877 744-4532, 212 405-7481) and SMBC Nikko Securities America, Inc. (888 868-6856, 212 224-5328).

The tender agent and information agent is Global Bondholder Services Corp. (212 430-3774, 866 807-2200, contact@gbsc-usa.com).

Occidental is a Houston oil and gas, chemical and midstream company.

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