Published on 8/7/2019 in the Prospect News Investment Grade Daily.
New Issue: Occidental Petroleum details $13 billion of senior notes in 10 parts
By Devika Patel
Knoxville, Tenn., Aug. 7 – Occidental Petroleum Corp. offered further details about a $13 billion sale of senior notes (Baa3/BBB/BBB+) that priced in 10 tranches better than talk on Tuesday, according to an FWP filed with the Securities and Exchange Commission.
The company sold $500 million of floating-rate notes due Feb. 8, 2021 at Libor plus 95 basis points. These notes priced at par.
A $500 million tranche of two-year floaters priced at Libor plus 125 bps. These notes priced at par.
The company sold $1.5 billion of 2.6% two-year fixed-rate notes at a spread of 105 bps over Treasuries. These notes priced at 99.912 to yield 2.645%.
A $1.5 billion tranche of three-year floating-rate notes priced at Libor plus 145 bps. These notes priced at par.
Occidental Petroleum sold $2 billion of 2.7% three-year notes at a Treasuries plus 120 bps spread. These notes priced at 99.893 to yield 2.737%.
A $3 billion tranche of 2.9% five-year notes came at a 140 bps over Treasuries spread. These notes priced at 99.87 to yield 2.928%.
The company brought $1 billion of 3.2% seven-year notes to the market at a spread of 160 bps over Treasuries. These notes priced at 99.931 to yield 3.211%.
A $1.5 billion tranche of 3.5% 10-year notes priced at a Treasuries plus 185 bps spread. These notes priced at 99.506 to yield 3.559%.
A $750 million offering of 4.3% 20-year notes was placed with a spread of 210 bps over Treasuries. These notes priced at 99.481 to yield 4.339%.
Finally, $750 million of 4.4% 30-year notes priced at a Treasuries plus 225 bps spread. These notes priced at 98.539 to yield 4.489%.
BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, HSBC Securities (USA) Inc., MUFG, RBC Capital Markets LLC, SG Americas Securities LLC and SMBC Nikko Securities America, Inc. were the bookrunners.
Occidental Petroleum held fixed income investor calls on Thursday and Friday for the registered deal.
The Los Angeles oil and gas, chemical and midstream company plans to use the proceeds to finance its merger with Anadarko Petroleum Corp.
The deal, valued at about $38 billion, was announced in April and is expected to close after Anadarko’s special shareholders’ meeting on Aug. 8.
| Issuer: | Occidental Petroleum Corp.
|
| Amount: | $13 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, HSBC Securities (USA) Inc., MUFG, RBC Capital Markets LLC, SG Americas Securities LLC and SMBC Nikko Securities America, Inc.
|
| Co-managers: | BBVA Securities Inc., CIBC World Markets Corp., Mizuho Securities USA Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments Inc., Standard Chartered Bank, Academy Securities, Inc., Loop Capital Markets LLC and Williams Capital Group LP
|
| Trade date: | Aug. 6
|
| Settlement date: | Aug. 8
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB
|
| Fitch: BBB+
|
| Distribution: | SEC registered
|
|
|
| 18-month floaters
|
| Amount: | $500 million
|
| Maturity: | Feb. 8, 2021
|
| Coupon: | Libor plus 95 bps
|
| Price: | Par
|
| Yield: | Libor plus 95 bps
|
| Call: | Non-callable
|
| Price guidance: | Libor plus 105 bps area, plus or minus 5 bps; initial talk at Libor plus 135 bps area
|
|
|
| Two-year floaters
|
| Amount: | $500 million
|
| Maturity: | Aug. 13, 2021
|
| Coupon: | Libor plus 125 bps
|
| Price: | Par
|
| Yield: | Libor plus 125 bps
|
| Call: | Par call after Aug. 13, 2020
|
| Price guidance: | Libor plus 135 bps area, plus or minus 5 bps; initial talk at Libor plus 165 bps area
|
|
|
| Two-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | Aug. 13, 2021
|
| Coupon: | 2.6%
|
| Price: | 99.912
|
| Yield: | 2.645%
|
| Spread: | Treasuries plus 105 bps
|
| Call: | Make-whole call at Treasuries plus 17.5 bps
|
| Price guidance: | Treasuries plus 115 bps area, plus or minus 5 bps; initial talk at Treasuries plus 145 bps area
|
|
|
| Three-year floaters
|
| Amount: | $1.5 billion
|
| Maturity: | Aug. 15, 2022
|
| Coupon: | Libor plus 145 bps
|
| Price: | Par
|
| Yield: | Libor plus 145 bps
|
| Call: | Par call after Aug. 15, 2020
|
| Price guidance: | Libor plus 155 bps area, plus or minus 5 bps; initial talk at Libor plus 185 bps area
|
|
|
| Three-year notes
|
| Amount: | $2 billion
|
| Maturity: | Aug. 15, 2022
|
| Coupon: | 2.7%
|
| Price: | 99.893
|
| Yield: | 2.737%
|
| Spread: | Treasuries plus 120 bps
|
| Call: | Make-whole call at Treasuries plus 20 bps
|
| Price guidance: | Treasuries plus 130 bps area, plus or minus 5 bps; initial talk at Treasuries plus 160 bps area
|
|
|
| Five-year notes
|
| Amount: | $3 billion
|
| Maturity: | Aug. 15, 2024
|
| Coupon: | 2.9%
|
| Price: | 99.87
|
| Yield: | 2.928%
|
| Spread: | Treasuries plus 140 bps
|
| Call: | Make-whole call at Treasuries plus 25 bps until July 15, 2024, then a par call
|
| Price guidance: | Treasuries plus 150 bps area, plus or minus 5 bps; initial talk at Treasuries plus 180 bps area
|
|
|
| Seven-year notes
|
| Amount: | $1 billion
|
| Maturity: | Aug. 15, 2026
|
| Coupon: | 3.2%
|
| Price: | 99.931
|
| Yield: | 3.211%
|
| Spread: | Treasuries plus 160 bps
|
| Call: | Make-whole call at Treasuries plus 25 bps until June 15, 2026, then a par call
|
| Price guidance: | Treasuries plus 170 bps area, plus or minus 5 bps; initial talk at Treasuries plus 205 bps area
|
|
|
| 10-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | Aug. 15, 2029
|
| Coupon: | 3.5%
|
| Price: | 99.506
|
| Yield: | 3.559%
|
| Spread: | Treasuries plus 185 bps
|
| Call: | Make-whole call at Treasuries plus 30 bps until May 15, 2029, then a par call
|
| Price guidance: | Treasuries plus 195 bps area, plus or minus 5 bps; initial talk at Treasuries plus 220 bps area
|
|
|
| 20-year notes
|
| Amount: | $750 million
|
| Maturity: | Aug. 15, 2039
|
| Coupon: | 4.3%
|
| Price: | 99.481
|
| Yield: | 4.339%
|
| Spread: | Treasuries plus 210 bps
|
| Call: | Make-whole call at Treasuries plus 35 bps until Feb. 15, 2039, then a par call
|
| Price guidance: | Treasuries plus 220 bps area, plus or minus 5 bps; initial talk at Treasuries plus 260 bps area
|
|
|
| 30-year notes
|
| Amount: | $750 million
|
| Maturity: | Aug. 15, 2049
|
| Coupon: | 4.4%
|
| Price: | 98.539
|
| Yield: | 4.489%
|
| Spread: | Treasuries plus 225 bps
|
| Call: | Make-whole call at Treasuries plus 35 bps until Feb. 15, 2049, then a par call
|
| Price guidance: | Treasuries plus 235 bps area, plus or minus 5 bps; initial talk at Treasuries plus 270 bps area
|
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