California Resources to issue new 8% notes due 2022 in exchange offer

By Susanna Moon

Chicago, Nov. 12 – California Resources Corp. said it began private offers to exchange up to $1 billion principal amount of three series of its outstanding notes.

California Resources is offering to swap out its $1 billion of 5% senior notes due 2020, $1.75 billion of 5½% senior notes due 2021 and $2.25 billion of 6% senior notes due 2024, according to a company announcement.

In exchange, the company is offering newly issued 8% second-lien notes due 2022.

The total exchange value will be $800 for each $1,000 principal amount of notes tendered for exchange by 5 p.m. ET on Nov. 25, the early participation date.

The total amount includes an early participation premium of $50 principal amount of new secured notes per $1,000 of old notes.

Holders who tender their notes for exchange after the early deadline will receive the exchange payment of $750 per $1,000 principal amount.

The company also will pay accrued interest up to but excluding the settlement date.

The exchange offers will end at 11:59 p.m. ET on Dec. 10.

Tenders may be withdrawn at any time before 5 p.m. ET on Nov. 25.

If the tendered amount of old notes exceeds the cap, then the notes will be accepted for exchange on a pro rata basis.

The exchange offers are conditioned on a security agreement and related intercreditor agreement for the new secured notes, but the offers are not subject to a minimum tender amount.

Holders must be qualified institutional buyers under Rule 144A or not a U.S. person under Regulation S, in order to participate in the offer.

Global Bondholder Services Corp. (866 470-3800, 212 430-3774 or gbsc-usa.com/eligibility/CaliforniaResources) is the exchange agent and information agent.

California Resources is a Los Angeles-based oil and gas exploration and production company.

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