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BP to price perpetual subordinated fixed-rate reset notes
By William Gullotti
Buffalo, N.Y., Feb. 26 – BP Capital Markets plc intends to price an offering of perpetual subordinated fixed-rate reset notes (Baa1//A-), according to a 424B5 filing with the Securities and Exchange Commission.
The notes will be guaranteed on a subordinated basis by BP plc.
The interest rate for the notes will remain fixed for 10 years, resetting at five-year intervals thereafter. If the notes are not redeemed prior to 2054, the reset rate will be at the five-year Treasury rate plus the initial margin plus an additional 25 basis points. Thereafter, the additional rate adjustment will be 100 bps.
The company may defer all or part of payments of interest on the notes.
The first call date will occur in 2033. The notes will be optionally redeemable on each subsequent interest payment date thereafter. There are also redemptions that may be triggered by an accounting event, rating agency event or tax deduction event, as well as an optional clean-up redemption.
Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are the joint bookrunning managers.
Bank of New York Mellon Trust Co., NA is the trustee.
Sullivan & Cromwell LLP is counsel to the issuer, with Cleary Gottlieb Steen & Hamilton LLP advising the underwriters.
BP Capital plans to use the proceeds for general corporate purposes, including working capital for BP or other companies in the BP group and to purchase notes under its tender offer for its outstanding $2.5 billion perpetual subordinated non-call 5.25-year fixed-rate reset notes (Cusip: 05565QDU9).
BP Capital is a Sunbury, U.K.-based debt issuer for oil and gas producing parent company BP.
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