Published on 6/1/2015 in the Prospect News Investment Grade Daily.
New Issue: Marathon Oil sells $2 billion of five-, 10-, 30-year senior notes
By Aleesia Forni
Virginia Beach, June 1 – Marathon Oil Corp. sold $2 billion of senior notes (Baa1/BBB/) in three maturities on Monday, according to an informed source and a FWP filed with the Securities and Exchange Commission.
There was $600 million of 2.7% five-year notes sold at 99.783 to yield 2.747% with a spread of Treasuries plus 120 basis points.
A $900 million 3.85% 10-year note priced at 99.771 to yield 3.878%, or Treasuries plus 170 bps.
Finally, $500 million of 5.2% 30-year bonds sold at 99.941 to yield 5.204% with a spread of Treasuries plus 225 bps.
All three tranches sold at the tight end of price guidance.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Scotia Capital (USA) Inc. and Muzho Securities (USA) Inc. are the bookrunners.
The company plans to use $1 billion of the proceeds to repay its 0.9% senior notes due Nov. 1, 2015 and for general corporate purposes.
The international energy company for oil sands mining and gas exploration and production is based in Houston.
| Issuer: | Marathon Oil Corp.
|
| Issue: | Senior notes
|
| Amount: | $2 billion
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| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Scotia Capital (USA) Inc., Mizuho Securities (USA) Inc.
|
| Co-managers: | BNY Mellon Capital Markets, LLC, DNB Markets, Inc., Fifth Third Securities, Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., Lloyds Securities Inc., Loop Capital Markets LLC, MUFG, PNC Capital Markets LLC, RBC Capital Markets, LLC, SG Americas Securities, LLC, SMBC Nikko Capital Markets Limited, Standard Chartered Bank, U.S. Bancorp Investments, Inc.
|
| Trade date: | June 1
|
| Settlement date: | June 10
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| Ratings: | Moody’s: Baa1
|
| Standard & Poor’s: BBB
|
| Distribution: | SEC-registered
|
|
|
| Five-year notes
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| Amount: | $600 million
|
| Maturity: | June 1, 2020
|
| Coupon: | 2.7%
|
| Price: | 99.783
|
| Yield: | 2.747%
|
| Spread: | Treasuries plus 120 bps
|
| Price guidance: | Treasuries plus 120 bps to 125 bps
|
| Make-whole call: | Treasuries plus 20 bps prior to May 1, 2020, then callable at par
|
|
|
| 10-year notes
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| Amount: | $900 million
|
| Maturity: | June 1, 2025
|
| Coupon: | 3.85%
|
| Price: | 99.771
|
| Yield: | 3.878%
|
| Spread: | Treasuries plus 170 bps
|
| Price guidance: | Treasuries plus 170 bps to 175 bps
|
| Make-whole call: | Treasuries plus 30 bps prior to March 1, 2025, then callable at par
|
|
|
| 30-year bonds
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| Amount: | $500 million
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| Maturity: | June 1, 2045
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| Coupon: | 5.2%
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| Price: | 99.941
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| Yield: | 5.204%
|
| Spread: | Treasuries plus 225 bps
|
| Price guidance: | Treasuries plus 225 bps to 230 bps
|
| Make-whole call: | Treasuries plus 35 bps prior to Dec. 1, 2044, then callable at par
|
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