Cenovus offers to buy notes from two pools for up to $750 million

By Wendy Van Sickle

Columbus, Ohio, Sept. 5 – Cenovus Energy Inc. announced it has begun tender offers to purchase for cash some of its outstanding series of notes for an aggregate purchase price, excluding accrued interest, of up to $750 million, according to a Tuesday press release.

The notes are divided into two pools. The first pool, which includes six series of notes, is subject to a maximum aggregate purchase price of $500 million. The maximum amount of the second pool, covering two series of notes, is $250 million.

Pool 1 tender offers

Under the first pool, Cenovus is offering to purchase notes from the following series, listed in order of acceptance priority level, for a maximum amount of $500 million:

• $583,102,000 outstanding 5.25% notes due 2037 (Cusip: 15135UAP4), with pricing to be based on the 3.875% U.S. Treasury due Aug. 15, 2033 and a fixed spread of 175 basis points with a series cap of $250 million;

• $97,004,000 outstanding 4.45% notes due 2042 (Cusip: 15135UAH2), with pricing to be based on the 4.375% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 200 bps;

• $28,549,000 outstanding 5.2% notes due 2043 (Cusip: 15135UAK5), with pricing to be based on the 4.375% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 205 bps;

• $239,598,000 outstanding 4.4% notes due 2029 (Cusip: 448055AP8), with pricing to be based on the 4.375% U.S. Treasury due Aug. 31, 2028 and a fixed spread of 145 bps;

• $799,872,000 outstanding 5.4% notes due 2047 (Cusip: 15135UAR0, 15135UAQ2, C23555AH5), with pricing to be based on the 3.625% U.S. Treasury due May 15, 2053 and a fixed spread of 170 bps; and

• $372,906,000 outstanding 4.25% notes due 2027 (Cusips: 15135UAM1, 15135UAL3), with pricing to be based on the 4.375% U.S. Treasury due Aug. 31, 2028 and a fixed spread of 95 bps.

Pool 2 tender offers

Under the second pool, Cenovus is offering to purchase notes from the following series, listed in order of acceptance priority level, for a maximum amount of $250 million:

• $386,773,000 outstanding 6.8% notes due 2037 (Cusip: 448055AD5), with pricing to be based on the 3.875% U.S. Treasury due Aug. 15, 2033 and a fixed spread of 200 bps; and

• $935,422,000 outstanding 6.75% notes due 2039 (Cusip: 15135UAF6), with pricing to be based on the 4.375% U.S. Treasury due Aug. 15, 2043 and a fixed spread of 170 bps.

Details

Pricing will be determined at 10 a.m. ET on Sept. 19.

The total consideration includes an early tender payment of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Sept. 18, the early tender date.

Holders tendering after the early tender date will only be eligible to receive the late tender offer consideration, which is the total consideration less the early tender payment.

Holders will also receive accrued interest up to but excluding the applicable settlement date.

The tender offers will expire at 5 p.m. ET on Oct. 3.

Cenovus may choose to settle early tendered notes on an early settlement date, which is expected to be Sept. 20.

Final settlement is expected to be on Oct. 5.

Cenovus said it reserves the right, but is under no obligation, to increase or decrease either of the maximum amounts.

Tenders may be withdrawn at or prior to 5 p.m. ET on Sept. 18.

The tender offers are not conditioned on any minimum principal amount of notes being tendered but are subject to some other conditions.

Cenovus said it intends to fund the purchase of notes tendered and accepted under the offers with cash on hand and short-term borrowings.

Goldman Sachs & Co. LLC (800 828-3182 or gs-lm-nyc@ny.email.gs.com), BMO Capital Markets Corp. (833 418-0762, 212 702-1840 or LiabilityManagement@bmo.com) and MUFG Securities Americas Inc. (877 744-4532 or 212 405-7481 are the dealer managers.

D.F. King & Co., Inc. (cve@dfking.com; 212 269-5550 for banks and brokers only or 888 644-5854 for all others) is the tender and information agent.

Cenovus is a Calgary, Alta.-based oil and gas company.

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