Hess announces early tender results in capped tender offer

New York, Sept. 30 – Hess Corp. announced that it received tenders for $498,957,000 of three series of notes in its maximum offer to purchase those securities.

The offer is now fully subscribed, according to a news release.

As of the early tender deadline of 5 p.m. ET, holders had submitted:

• $196,004,000 of its $700 million of 7.875% notes due Oct. 1, 2029;

• $185,455,000 of its $750 million of 7.3% notes due Aug. 15, 2031; and

• $117,498,000 of its $600 million of 7.125% notes due March 15, 2033.

No further notes will be accepted for purchase because the cap has already been met, Hess said.

Pricing for the tender offer will be set at 2 p.m. ET on Oct. 3 and settlement is planned for Oct. 4.

The maximum tender offer was scheduled to expire at 11:59 p.m. ET on Oct. 17 but that deadline is now irrelevant since no more tenders will be accepted.

Hess announced the maximum tender on Sept. 19 along with an any-and-all offer for its $1 billion of 8.125% notes due Feb. 15, 2019.

The any-and-all offer ended at 5 p.m. ET on Sept. 23 and Hess announced on Sept. 26 that holders had tendered $653,191,000 of those notes.

The amount of 8.125% notes tendered in the any-and-all offer includes $3.15 million of notes tendered under guaranteed delivery procedures.

The purchase price is $1,154.64 for each $1,000 principal amount of 8.125% notes plus accrued interest up to but excluding the expected settlement date.

Pricing for the 8.125% notes was set at 2 p.m. on Sept. 23 using the 0.875% U.S. Treasury notes due Sept. 15, 2019 plus a spread of 60 basis points.

Capped offers

In the capped tender offers, the maximum amount that Hess will pay to repurchase the notes will be the lesser of $375 million and $1,075,000,000 less the total payment for the any-and-all offer.

The company expects to pay about $754.2 million to settle the any-and-all offer. As a result, the company will spend about $320.8 million in the capped offers.

Pricing for the capped offers will be set at 2 p.m. ET on Oct. 3 using a reference security plus a fixed spread as follows, with the notes listed in order of priority acceptance levels:

• The 1.5% U.S. Treasury notes due Aug. 15, 2026 plus 360 bps for the company’s 7.875% notes;

• The 1.5% U.S. Treasury notes due Aug. 15, 2026 plus 365 bps for its 7.3% notes; and

• The 2.5% U.S. Treasury notes due May 15, 2046 plus 327 bps for its 7.125% notes.

The total amount will include a $30 premium per $1,000 principal amount of notes tendered by the early tender date.

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

The company said it plans to fund the offers with proceeds of the $1.5 billion sale of its 4.3% notes due 2027 and its 5.8% notes due 2047, which closed Sept. 28.

Goldman Sachs & Co. (800 828-3182 or 212 357-1039), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424), Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057), Mizuho Securities USA Inc. and MUFG Securities Americas Inc. are the dealer managers. Global Bondholder Services Corp. (866 470-4500, 212 430-3774 or gbsc-usa.com/Hess/) is the information agent and the depositary.

Hess is a New York-based independent oil and gas producer.

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