Occidental Petroleum gets $8.8 billion term loans, lifts revolver

By Sarah Lizee

Olympia, Wash., Aug. 8 – Occidental Petroleum Corp. entered into an $8.8 billion term loan agreement on June 3 with Citibank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Funding was contingent on completion of Occidental’s acquisition of Anadarko Petroleum Corp., which closed on Thursday.

The term loan agreement consists of a $4.4 billion 364-day senior unsecured term loan and a $4.4 billion two-year senior unsecured term loan.

Proceeds of the term loan facilities were used by Occidental to partially finance the merger and pay related fees and expenses.

The 364-day term loan bears interest at Libor plus 50 basis points to 175 bps, and the two-year term loan bears interest at Libor plus 62.5 bps to 187.5 bps. Both margins are based on debt ratings.

The agreement contains a customary negative pledge and 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.

Citibank, BofA Securities, Inc., Barclays Bank plc, HSBC Securities (USA) Inc., JPMorgan Chase Bank, NA, MUFG Bank, Ltd., RBC Capital Markets, Societe Generale, Sumitomo Mitsui Banking Corp., Bank of Nova Scotia and Wells Fargo Securities, LLC are joint lead arrangers and joint bookrunners.

Bank of America, NA is the syndication agent. Barclays, HSBC Bank, NA, JPMorgan Chase Bank, NA, MUFG, Royal Bank of Canada, Societe Generale, Sumitomo and Scotiabank are documentation agents.

Also on June 3, Occidental amended its revolver with JPMorgan Chase Bank, NA as administrative agent, increasing commitments to $5 million from $3 billion.

As of Thursday, the revolver was undrawn.

The revolver matures Jan. 31, 2023 and bears interest at Libor plus 46 bps to 145 bps, also based on ratings.

The revolver contains the same customary negative pledge and a covenant as the term loan.

JPMorgan, BofA Securities, Barclays, Citibank, HSBC, MUFG, RBC, Societe Generale, Sumitomo and Wells Fargo are the joint lead arrangers and joint bookrunners for the revolver. Bank of America is the syndication agent and Barclays, Citibank, HSBC, RBC, Societe Generale, Sumitomo and Wells Fargo are the documentation agents.

Occidental is a Los Angeles oil and gas, chemical and midstream company.

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