By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., April 10 – Diamondback Energy Inc. detailed the Tuesday sale of $5.5 billion of fixed-rate senior notes in five parts (Baa2/BBB-/BBB), which was upped from earlier deal size talk of around $5 billion, according to an FWP filed with the Securities and Exchange Commission and details from a market source.
The company priced
• $850 million of 5.2% senior notes due 2027 at 99.956 to yield 5.216%, or Treasuries plus 65 basis points. Price talk was in the Treasuries plus 95 bps area;
• $850 million of 5.15% senior notes due Jan. 30, 2030 at 99.83 to yield 5.186%, or 80 bps above Treasuries. Talk has the notes coming in the 110 bps area;
• $1.3 billion of 5.4% senior notes due 2034 at 99.679 to yield 5.442%, or Treasuries plus 107 bps. Price talk was in the 135 bps area;
• $1.5 billion of 5.75% senior notes due 2054 at 99.957 to yield 5.753%, or 127 bps above Treasuries, versus talk in the 155 bps area; and
• $1 billion of 5.9% senior notes due 2064 at 99.954 to yield 5.903%, or Treasuries plus 142 bps. Price talk was in the Treasuries plus 170 bps area.
Each series of notes features a make-whole call prior to a par call.
The 2027 and 2030 notes are callable at Treasuries plus 10 bps and 15 bps, respectively, until one month before maturity and after at par.
The 2034 notes are callable at Treasuries plus 20 bps until three months before maturity and after at par.
The 2054 and 2064 notes are callable at Treasuries plus 20 bps and 25 bps, respectively, until six months before maturity and after at par.
Citigroup Global Markets Inc., BofA Securities, Inc. and TD Securities (USA) LLC are leading the sale.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are also listed as bookrunners.
Each series will be guaranteed by Diamondback E&P LLC.
Proceeds will be used to support the acquisition of Endeavour, an oil and natural gas company. The company received an $8 billion senior bridge term loan for the acquisition, which has been reduced to $6.5 billion with a term loan. It will be further reduced on a dollar-to-dollar basis based on this notes offering.
The outside date for the acquisition is Aug. 11, 2025. There will be a special mandatory redemption at 101 if the acquisition has not closed by the outside date.
Diamondback is a Midland, Tex.-based oil and natural gas company.
| Issuer: | Diamondback Energy Inc.
|
| Guarantor: | Diamondback E&P LLC
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| Amount: | $5.5 billion
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| Issue: | Senior notes
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| Bookrunners: | Citigroup Global Markets Inc., BofA Securities, Inc. and TD Securities (USA) LLC
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| Passive bookrunners: | Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
|
| Senior co-managers: | Barclays, BOK Financial Securities, Inc., Capital One Securities, Inc., Comerica Securities, Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and U.S. Bancorp Investments, Inc.
|
| Trustee: | Computershare Trust Co., NA
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| Counsel to issuer: | Wachtell, Lipton, Rosen & Katz
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| Counsel to underwriters: | Latham & Watkins LLP
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| Trade date: | April 9
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| Settlement date: | April 18
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| Ratings: | Moody’s: Baa2
|
| S&P: BBB-
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| Fitch: BBB
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| Distribution: | SEC registered
|
|
|
| 2027 notes
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| Amount: | $850 million
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| Maturity: | April 18, 2027
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| Coupon: | 5.2%
|
| Price: | 99.956
|
| Yield: | 5.216%
|
| Spread: | Treasuries plus 65 bps
|
| Call features: | Make whole call at Treasuries plus 10 bps before March 18, 2027; after at par
|
| Price talk: | Treasuries plus 95 bps area
|
| Cusip: | 25278XAX7
|
|
|
| 2030 notes
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| Amount: | $850 million
|
| Maturity: | Jan. 30, 2030
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| Coupon: | 5.15%
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| Price: | 99.83
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| Yield: | 5.186%
|
| Spread: | Treasuries plus 80 bps
|
| Call features: | Make whole call at Treasuries plus 15 bps before Dec. 30, 2029; after at par
|
| Price talk: | Treasuries plus 110 bps area
|
| Cusip: | 25278XAY5
|
|
|
| 2034 notes
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| Amount: | $1.3 billion
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| Maturity: | April 18, 2034
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| Coupon: | 5.4%
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| Price: | 99.679
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| Yield: | 5.442%
|
| Spread: | Treasuries plus 107 bps
|
| Call features: | Make whole call at Treasuries plus 20 bps before Jan. 18, 2034; after at par
|
| Price talk: | Treasuries plus 135 bps area
|
| Cusip: | 25278XAZ2
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|
|
| 2054 notes
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| Amount: | $1.5 billion
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| Maturity: | April 18, 2054
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| Coupon: | 5.75%
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| Price: | 99.957
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| Yield: | 5.753%
|
| Spread: | Treasuries plus 127 bps
|
| Call features: | Make whole call at Treasuries plus 20 bps before Oct. 18, 2053; after at par
|
| Price talk: | Treasuries plus 155 bps area
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| Cusip: | 25278XBA6
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|
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| 2064 notes
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| Amount: | $1 billion
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| Maturity: | April 18, 2064
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| Coupon: | 5.9%
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| Price: | 99.954
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| Yield: | 5.903%
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| Spread: | Treasuries plus 142 bps
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| Call features: | Make whole call at Treasuries plus 25 bps before Oct. 18, 2063; after at par
|
| Price talk: | Treasuries plus 170 bps area
|
| Cusip: | 25278XBB4
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