Apache posts early tender outcome, ups purchase cap for pool 1 offers

By Susanna Moon

Chicago, Aug. 23 – Apache Corp. gave the early tender results of its 10 separate offers to purchase up to $800 million of notes in two parts, which began on Aug. 9.

The maximum purchase price has been increased to allow the purchase of $378,974,000 principal amount of priority levels 1 through 4 notes tendered in the pool 1 offers before the early deadline of 5 p.m. ET on Aug. 2, according to a notice.

Other terms of the offers remain unchanged, including the maximum purchase price for the pool 2 offers, the release noted.

For the pool 1 offers, the company was offering to spend up to $450 million of seven series of notes with pricing to be set using a benchmark security plus a fixed spread. The early tendered amounts are as follows, with the notes listed in order of priority acceptance levels:

• $450,544,000 of the $1 billion outstanding 6% notes due 2037 with $200 million series maximum and pricing to be set using the 3.125% Treasury due May 15, 2048 plus 170 basis points;

• $46,732,000 of the $180 million outstanding 7.95% notes due 2026 with pricing to be set using the 2.875% Treasury due May 15, 2028 plus 140 bps;

• $21,412,000 of the $100 million outstanding 7.7% notes due 2026 with pricing to be set using the 2.875% Treasury due May 15, 2028 plus 140 bps;

• $110.83 million of the $150 million outstanding 7.625% debentures due 2096 with pricing to be set using the 3.125% Treasury due May 15, 2048 plus 250 bps;

• $74,862,000 of the $300 million outstanding 7.75% notes due 2029 with pricing to be set using the 2.875% Treasury due May 15, 2028 plus 150 bps;

• $29,237,000 of the $150 million outstanding 7.375% debentures due 2047 with pricing to be set using the 3.125% Treasury due May 15, 2048 plus 185 bps; and

• $41,579,000 of the $150 million outstanding 7.625% notes due 2019 with pricing to be set using the 2.625% Treasury due July 31, 2020 plus 0 bps.

For the pool 2 offers, the company was offering to spend up to $350 million of seven series of notes with pricing to be set using a benchmark security plus a fixed spread. The early tendered amounts are as follows, with the notes listed in order of priority acceptance levels:

• $294.09 million of the $528.23 million outstanding 2.625% notes due 2023 with $125 million series maximum and pricing to be set using the 2.75% Treasury due July 31, 2023 plus 60 bps;

• $259.2 million of the $492.58 million outstanding 3.625% notes due 2021 with $100 million series maximum and pricing to be set using the 2.75% Treasury due Aug. 15, 2021 plus 45 bps; and

• $598,266,000 of the $813.99 million outstanding 3.25% notes due 2022 with pricing to be set using the 2.75% Treasury due July 31, 2023 plus 55 bps.

Pricing was scheduled for 11 a.m. ET on Aug. 23.

The purchase price will include an early tender premium of $30 per $1,000 principal amount of notes tendered by the early deadline.

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

The settlement date for notes tendered before the early deadline is expected to be Aug. 24.

Tendered notes may not be withdrawn as of the early deadline.

The tender offers were set to continue until 11:59 p.m. ET on Sept. 6; however, because the offers have been oversubscribed as of the early deadline, Apache said it does not expect to accept any more notes tendered in the offers.

The offers contain a financing condition, which is expected to be met on Aug. 23.

As reported, Apache sold $1 billion of 4.375% 10-year senior notes on Aug. 14 at a spread of 150 bps over Treasuries, which priced at 99.845 to yield 4.393%.

BofA Merrill Lynch (888 292-0070 or 980 387-3907), Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-1862) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) are the dealer managers. D. F. King & Co., Inc. (800 967-4607) is the tender agent and information agent.

Apache is an oil and gas exploration and production company based in Houston.

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