Marathon Oil Corporation Announces Pricing of Offering of $1 Billion of Senior Notes Due 2027
July 13 2017 - 5:01PM
Marathon Oil Corporation (NYSE: MRO) announced today that it has
priced an offering of $1 billion of 4.400 percent Senior Notes that
will mature on July 15, 2027, pursuant to an effective shelf
registration statement that was previously filed with the
Securities and Exchange Commission. The price to the public for the
2027 Notes is 99.634 percent of the principal amount.
The Company intends to use the net proceeds from the offering
plus existing cash on hand to redeem the following Senior
Notes:
- $682 million 6.0% Notes Due in 2017
- $854 million 5.9% Notes Due in 2018
- $228 million 7.5% Notes Due in 2019
The offering and redemption of the Senior Notes will result in a
reduction in total gross debt of approximately $750 million and
generate annual cash interest savings of approximately $60 million.
Subsequently, the Company’s next maturity will occur in 2020.
Concurrent with the offering of 2027 Notes, the Company
terminated a notional amount of $750 million in interest rate
hedges related to the offering for an estimated gain of $54
million, lowering the estimated all-in yield (after giving effect
to underwriting fees and interest rate hedge settlements) to 3.862
percent.
The Company recently extended the maturity of its undrawn
revolving credit facility by one year to 2021, and upsized the
credit facility from $3.3 billion to $3.4 billion.
Additionally, the Company expects to receive the remaining
proceeds of approximately $750 million from the sale of its
Canadian subsidiary in first quarter 2018.
The offering is expected to close on July 24, 2017, subject to
customary closing conditions. It is being underwritten by J.P.
Morgan Securities LLC, Citigroup Global Markets Inc., HSBC
Securities (USA) Inc., Mizuho Securities USA LLC, Morgan Stanley
& Co. LLC, Scotia Capital (USA) Inc., SG Americas
Securities, LLC and TD Securities (USA) LLC as Joint Book-Running
Managers. The offering is being made only by means of a prospectus
supplement and accompanying prospectus, copies of which may be
obtained from J.P. Morgan Securities LLC, 383 Madison Avenue, New
York, NY 10179, Attention: Investment Grade Syndicate Desk (or
telephone collect at 1-212-834-4533) or from Citigroup Global
Markets Inc. c/o Broadridge Financial Solutions, 1155 Long Island
Avenue, Edgewood, NY 11717 (or call toll-free at 1-800-831-9146).
An electronic copy of the prospectus supplement will be available
on the website of the Securities and Exchange Commission at
www.sec.gov.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale of these securities would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical fact, including statements
regarding the completion of the proposed offering and use of
proceeds thereof, as well as financial liquidity, are
forward-looking statements. While the Company believes that its
assumptions concerning future events are reasonable, a number of
factors could cause results to differ materially including the risk
factors, forward-looking statements and challenges and
uncertainties described in the Company's 2016 Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and other public filings and
press releases, available at www.marathonoil.com. Except as
required by law, the Company undertakes no obligation to revise or
update any forward-looking statements as a result of new
information, future events or otherwise.
The Company has filed a registration statement
(including a prospectus) with the SEC for the offering to which
this communication relates. Before you invest, you should read the
prospectus in that registration statement, the prospectus
supplement relating to this offering and other documents the
Company has filed with the SEC for more complete information about
the Company and this offering. You may get these documents for free
by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, copies may be obtained from:
Marathon Oil Corporation 5555 San Felipe
StreetHouston, Texas 77056-2723
Attention: Corporate Secretary
Media Relations Contact
Lee Warren: 713-296-4103
Investor Relations Contact
Zach Dailey: 713-296-4140
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