Devon receives tenders for $616.41 million notes in any and all offer

New York, Aug. 10 – Devon Energy Corp. received tenders for a total of $616.41 million of notes in the two series covered by its any-and-all offer, according to a news release.

The company also announced pricing for this phase of a two-part off to buy notes from eight series for a maximum repurchase amount of $1.2 billion.

In the any-and-all offer, Devon received tenders for $96,689,000 of its $125 million of outstanding 8.25% notes due 2018 issued by Devon OEI Operating, LLC, which includes about $48 million of privately placed notes.

The response includes $48,015,000 tendered under guaranteed delivery procedures.

Pricing for the 8.25% notes was set at $1,128.44 per $1,000 principal amount, a sum calculated using the 0.75% U.S. Treasury note due July 31, 2018 plus 65 bps.

Devon also received tenders for $519,725,000 of its $700 million of outstanding 6.3% notes due 2019.

Of the total, $18,539,000 were tendered under guaranteed delivery procedures.

Pricing was fixed at $1,107.70 per $1,000 principal amount using the 0.75% U.S. Treasury note due July 15, 2019 plus 95 bps.

This part of the tender ended at 5 p.m. ET on Aug. 10. Pricing was set at 2 p.m. ET and settlement is scheduled for Aug. 11, or Aug. 15 for notes tendered under guaranteed delivery procedures.

In addition to the purchase price, holders will also receive accrued interest up to but excluding the payment date.

The second part of the tender continues. It is a capped offer with a repurchase amount that will be $1.2 billion less the payment for the any-and-all offers.

Pricing for the capped offers will be set using the yield to maturity on the bid-side price of a benchmark security rate plus a spread at 2 p.m. ET on Aug. 18, with the notes listed in order of priority acceptance level as follows:

• $750 million of outstanding 2.25% notes due 2018 using the 0.75% U.S. Treasury note due July 31, 2018 plus 65 bps;

• $150 million of outstanding 7.5% notes due 2027 using the 1.625% U.S. Treasury note due May 15, 2026 plus 290 bps;

• $1.25 billion of outstanding 7.875% debentures due 2031 issued by Devon Financing Co., LLC using the 2.5% U.S. Treasury note due May 15, 2046 plus 325 bps;

• $1 billion of outstanding 7.95% debentures due 2032 using the 2.5% U.S. Treasury note due May 15, 2046 plus 335 bps;

• $500 million of outstanding 4% notes due 2021 using the 1.125% U.S. Treasury note due July 31, 2021 plus 185 bps; and

• $1.25 billion of outstanding 5.6% notes due 2041 using the 2.5% U.S. Treasury note due May 15, 2046 plus 340 bps.

The total purchase price for the capped offers will include a $30 early tender premium for each $1,000 principal amount of notes tendered by 5 p.m. ET on Aug. 17, the early tender date.

The maximum tender offers will remain open until 11:59 p.m. ET on Aug. 31.

Holders who tender their notes in the offer after the early deadline will receive the total amount less the early premium.

Notes tendered before the early deadline in the capped offers will be given priority over those tendered afterward.

In the capped offers, tendered notes may be withdrawn at any time before the early deadline.

The company also will pay accrued interest up to but excluding the payment date of Aug. 19 for early tenders and Sept. 1 for any remaining tenders.

Devon Energy will fund the tender offers with proceeds from previously completed asset sales and financing transactions.

The tender offers are being made to reduce the company’s outstanding debt, including the debt of its subsidiaries, according to a company announcement.

The tender offers are not subject to minimum tender conditions.

After the offers, the company said it may purchase more of the notes in the open market, in privately negotiated transactions, through tender or exchange offers or redemptions.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) and RBC Capital Markets, LLC (877 381-2099 or 212 618-7822) are the lead dealer managers. The co-dealer managers are CIBC World Markets Corp., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc.

D.F. King & Co., Inc. (800 967-4617, 212 269-5550 or dfking.com/dvn) is the tender and information agent.

Devon is an oil, natural gas and natural gas liquids company based in Oklahoma City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.