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Occidental Petroleum enters $4.7 billion two-tranche term loan
By Marisa Wong
Los Angeles, Dec. 28 – Occidental Petroleum Corp. entered into a $4.7 billion term loan agreement on Dec. 28 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The credit facility consists of a 364-day senior unsecured term loan in an aggregate principal amount of $2 billion and a two-year senior unsecured term loan in an aggregate principal amount of $2.7 billion.
Loan proceeds will be used to pay all or a portion of the cash consideration for Occidental’s previously announced acquisition of CrownRock, LP, fund the refinancing of some of CrownRock’s debt and pay related fees and expenses.
Loans will bear interest at term SOFR plus an applicable spread that ranges from 112.5 basis points to 225 bps for the 364-day tranche and between 125 bps and 237.5 bps for the two-year tranche, in each case based on the company’s senior unsecured, non-credit-enhanced, publicly held, long-term debt ratings.
In addition, Occidental will pay a commitment fee on the average daily amount of undrawn commitments under the term loans during the period from and including March 9, 2024 to but excluding the date on which the commitments terminate. The fee fluctuates between 12.5 bps and 35 bps, based on ratings.
The agreement contains a covenant that Occidental will maintain, as of the last day of each fiscal quarter, a ratio not in excess of 0.65 to 1.00 of total debt to total capitalization.
BofA Securities, Inc. is the lead arranger and bookrunner.
JPMorgan Chase Bank, NA, MUFG Bank, Ltd. and Sumitomo Mitsui Banking Corp. are syndication agents.
Citibank, NA, HSBC Securities (USA) Inc., Royal Bank of Canada, Standard Chartered Bank, TD Securities (USA) LLC and Wells Fargo Bank, NA are documentation agents.
Occidental is a Houston-based oil and gas, chemical and midstream company.
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