Apache reports early tenders for $1.29 billion notes, gives pricing and acceptance amounts

By Wendy Van Sickle

Columbus, Ohio, June 19 – Apache Corp. announced pricing and acceptance amounts in its tender offers for nine series of notes on Wednesday after announcing earlier in the day that holders tendered $1,287,180,000 of the notes by the early tender deadline of 5 p.m. ET on June 18.

Specifically, holders tendered by the early deadline $839,886,000 from three series of notes in Pool 1 and $447,294,000 from six series of notes in Pool 2 as of the, according to a company news release.

Pool 1 includes the three earliest-dated notes, including the outstanding amount of its 2.625% notes due 2023, 3.625% notes due 2021 and 3.25% notes due 2022. Pool 2 includes the later-dated notes, including the 6% notes due 2037, 7.625% notes due 2096, 7.75% notes due 2029, 7.95% notes due 2026, 7.7% notes due 2026 and 7.375% notes due 2047.

Pool 1 had a maximum purchase price of $550 million, and Pool 2 had a maximum purchase price of $450 million.

The company reported it would accepted $545,767,000 of tendered Pool 1 notes and $386,224,000 of tendered Pool 2 notes.

Specifically, Pool 1 noteholders tendered by the early deadline the following amounts:

• $222,472,000 of Apache’s $403,235,000 outstanding 2.625% notes due 2023, all of which will be accepted for a consideration per $1,000 principal amount of $996.65 based on a spread of 85 basis points over the 2% Treasury due May 31, 2024;

• $157,798,000 of its $392,582,000 outstanding 3.625% notes due 2021, subject to a $100 million series cap, resulting in an acceptance amount of $99,995,000 for a consideration per $1,000 principal amount of $1,015.06 based on the 2.125% Treasury due May 31, 2021 and a fixed spread of 60 bps; and

• $459,616,000 of the $686,492,000 outstanding 3.25% notes due 2022, $223,209,000 of which will be accepted for a consideration per $1,000 principal amount of $1,015.96 based on the 2.125% Treasury due May 15, 2022 and a fixed spread of 75 bps.

Pool 2 noteholders tendered:

• $333,185,000 of the $800,025,000 outstanding 6% notes due 2037, all of which will be accepted with pricing per $1,000 principal amount set at $1,143.87 based on the 3% Treasury due Feb. 15, 2049 and a fixed spread of 220 bps;

• None of the $39.17 million outstanding 7.625% notes due 2096;

• $79,583,000 of the $300 million outstanding 7.75% notes due 2029; the company will accept $53,039,000 of these tenders for $1,298.64 per $1,000 principal amount, with pricing based on the 2.375% Treasury due May 15, 2029 and a fixed spread of 210 bps;

• $1,405,000 of the $133,268,000 outstanding 7.95% notes due 2026, none of which will be accepted;

• $5.21 million of the $78,588,000 outstanding 7.7% notes due 2026, none of which will be accepted;

• $27,911,000 of the $150 million outstanding 7.375% notes due 2047, none of which will be accepted.

Holders who tendered their notes prior to the early tender deadline were eligible to receive the total consideration, which includes an early tender premium of $30 per $1,000 principal amount.

Holders tendering after the early deadline would only be eligible to receive the tender consideration, or the total consideration less the early tender premium, but the company said it does not expect to accept any additional tenders given that the offers were oversubscribed at the early deadline. The final tender deadline is on July 2.

Apache expects early settlement to occur on June 21.

The acceptance priority level procedures operated concurrently, but separately, for the Pool 1 and Pool 2 notes.

Subject to the overall offer cap, the pool caps and 2021 series subcap and proration, notes having a higher acceptance priority level were accepted before notes with a lower acceptance priority level. However, notes tendered at or before the early tender deadline were to be accepted for purchase in priority to notes tendered after the early deadline, even if the later tendered notes had a higher acceptance priority level than the notes tendered earlier.

Citigroup (800 558-3745 or 212 723-6106) and Wells Fargo Securities (866 309-6316 or 704 410-4756) are lead dealer managers, and HSBC and TD Securities are co-dealer managers. D.F. King & Co., Inc. (800 967-7510 or apache@dfking.com) is the tender agent and information agent.

Based in Houston, Apache is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom.

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