By Angela McDaniels
Tacoma, Wash., Dec. 19 – Devon Energy Corp. set pricing in its capped tender offer for 10 series of notes, announced the results of the offer as of the early tender date and increased the maximum aggregate purchase price, according to a company news release and an 8-K filing with the Securities and Exchange Commission.
The cap was increased from $1 billion to about $1.1 billion, which is the amount necessary to pay the total consideration for the notes tendered as of the early tender date, 5 p.m. ET on Dec. 16.
Holders had tendered $899,996,000 principal amount of notes with the seven highest acceptance priority levels as of the early tender date. No other tendered notes will be accepted for purchase.
The offer covers the company’s 2¼% notes due 2018, 6.3% notes due 2019, 7.95% debentures due 2032, 5.85% notes due 2025, 4% notes due 2021, 5.6% notes due 2041 and 3¼% notes due 2022; Devon OEI Operating, LLC’s 8¼% notes due 2018 and 7½% notes due 2027 and Devon Financing Co., LLC’s 7 7/8% debentures due 2031.
As of the early tender date, holders had tendered $8,004,000 principal amount, or 28.3%, of the 8¼% notes; $15,682,000, or 14.2%, of the 2.25% notes; $36,137,000, or 18.2%, of the 6.3% notes; $76,711,000, or 51.1%, of the 7½% notes; $191,352,000, or 15.3%, of the 7 7/8% debentures; $211,242,000, or 21.1%, of the 7.95% debentures; and $360,868,000, or 42.5%, of the 5.85% notes.
The tender offer began Dec. 5 and will officially end at 11:59 p.m. ET on Jan. 3, although no additional notes will be accepted for purchase.
The total considerations per $1,000 principal amount of notes are noted in the table below. The notes are listed in order of acceptance priority level.
The total considerations were determined by reference to a fixed spread plus the yield to maturity based on the bid-side price of an applicable reference Treasury at 2 p.m. ET on Dec. 19.
Each total consideration includes an early tender payment of $30.00 per $1,000 principal amount of notes tendered by the early tender date.
Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be Dec. 20.
Devon Energy will fund the tender offer with previously completed asset sales and financing transactions.
Following the completion of the tender offer, the company may purchase additional notes in the open market, in privately negotiated transactions, through tender or exchange offers or otherwise, or the applicable issuer may redeem notes.
The lead dealer managers are Barclays (800 438-3242 or 212 528-7581), BofA Merrill Lynch (888 292-0070 or 980 387-3907), Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) and RBC Capital Markets LLC (877 381-2099 or 212 618-7822). The co-dealer managers are Credit Suisse Securities (USA) LLC, MUFG Securities Americas Inc., UBS securities LLC and Wells Fargo Securities, LLC.
The tender and information agent is D.F. King & Co., Inc. (800 967-4617 or 212 269-5550).
Devon Energy is an oil and natural gas company based in Oklahoma City.
Devon Energy tender offer
| Issue | Amount outstanding | Reference Treasury | Fixed spread | Total consideration
|
| 8¼% notes | $28,311,000 | 1% Treasury due Nov. 30, 2018 | 65 bps | $1,095.62
|
| 2¼% notes | $110,452,000 | 1% Treasury due Nov. 30, 2018 | 65 bps | $1,006.85
|
| 6.3% notes | $198,481,000 | 1% Treasury due Nov. 15, 2019 | 95 bps | $1,076.51
|
| 7½% notes | $150 million | 2% Treasury due Nov. 15, 2026 | 180 bps | $1,267.92
|
| 7 | 7/8% debentures | $1.25 billion | 2.25% Treasury due Aug. 15, 2046 | 210 bps | $1,267.88
|
| 7.95% debentures | $1 billion | 2.25% Treasury due Aug. 15, 2046 | 225 bps | $1,263.83
|
| 5.85% notes | $850 million | 2% Treasury due Nov. 15, 2026 | 145 bps | $1,135.40
|
| 4% notes | $500 million | 1.75% Treasury due Nov. 30, 2021 | 125 bps | —
|
| 5.6% notes | $1.25 billion | 2.25% Treasury due Aug. 15, 2046 | 235 bps | —
|
| 3¼% notes | $1 billion | 1.75% Treasury due Nov. 30, 2021 | 150 bps | —
|
© 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.
