By Paul A. Harris
Portland, Ore., Aug. 12 – Occidental Petroleum Corp. priced an upsized $3 billion of senior notes (Ba2/BB+/BB) in three bullet tranches on Wednesday, according to market sources.
The deal included:
• $900 million of five-year notes, which priced at par to yield 5 7/8%. The yield printed at the tight end of yield talk and initial guidance in the 6% area;
• $600 million of eight-year notes, which priced at par to yield 6 3/8%, in the middle of yield talk and initial guidance in the 6 3/8% area; and
• $1.5 billion of 10-year notes, which priced at par to yield 6 5/8%, in the middle of yield talk and initial guidance in the 6 5/8% area.
The overall amount of issuance doubled from the announced size of $1.5 billion.
In the wake of pricing, the notes in all three tranches were trading somewhat sloppily in the context of 99 bid, par offered, a high-yield bond trader said on Wednesday afternoon.
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 were the bookrunners.
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.
| Issuer: | Occidental Petroleum Corp.
|
| Amount: | $3 billion, increased from $1.5 billion
|
| Securities: | Senior notes
|
| Bookrunners: | 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
|
| Senior co-managers: | 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: | BNP Paribas Securities Corp., CIBC World Markets Corp., Credit Agricole CIB, Mizuho Securities USA Inc. and U.S. Bancorp Investments Inc.
|
| Call protection: | Non-callable
|
| Trade date: | Aug. 12
|
| Settlement date: | Aug. 26
|
| Ratings: | Moody's: Ba2
|
| S&P: BB+
|
| Fitch: BB
|
| Distribution: | SEC registered
|
| Marketing: | Drive-by
|
|
|
| Notes due 2025
|
| Amount: | $900 million
|
| Maturity: | Sept. 1, 2025
|
| Coupon: | 5 7/8%
|
| Price: | Par
|
| Yield: | 5 7/8%
|
| Spread: | 558 bps
|
| Price talk: | 6% area
|
|
|
| Notes due 2028
|
| Amount: | $600 million
|
| Maturity: | Sept. 1, 2028
|
| Coupon: | 6 3/8%
|
| Price: | Par
|
| Yield: | 6 3/8%
|
| Spread: | 558 bps
|
| Price talk: | 6 3/8% area
|
|
|
| Noted due 2030
|
| Amount: | $1.5 billion
|
| Maturity: | Sept. 1, 2030
|
| Coupon: | 6 5/8%
|
| Price: | Par
|
| Yield: | 6 5/8%
|
| Spread: | 595 bps
|
| Price talk: | 6 5/8% area
|
|
|
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