PITTSBURGH, April 23, 2020 /PRNewswire/ -- EQT
Corporation (the Company or EQT) (NYSE: EQT) announced today
the pricing of $440 million aggregate
principal amount of its 1.75% convertible senior notes due 2026
(the "notes") in a private offering (the "offering") to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the "Securities Act"). The aggregate principal
amount of the offering was increased from the previously announced
offering size of $350 million. EQT also granted the
initial purchasers of the notes a 13-day option to purchase up to
an additional $60 million aggregate
principal amount of notes. The aggregate principal amount of the
option was increased from the previously announced option to
purchase up to an additional $52.5
million aggregate principal amount of notes. EQT expects the
offering to close on April 28, 2020,
subject to the satisfaction of customary closing conditions.
The notes will be senior unsecured obligations of EQT and will
bear interest at a rate of 1.75% per annum, payable semiannually in
arrears on May 1 and November 1 of each year, beginning on
November 1, 2020. The notes will
mature on May 1, 2026, unless earlier
redeemed, repurchased or converted. The initial conversion rate
will be 66.6667 shares of EQT's common stock per $1,000 principal amount of notes (equivalent to
an initial conversion price of $15.00
per share of common stock). The initial conversion price of the
notes represents a premium of 20% over the last reported sale price
of EQT's common stock on the New York Stock Exchange (the "NYSE")
on April 23, 2020. Prior to the close
of business on the business day immediately preceding February 1, 2026, the notes will be convertible
at the option of the holders of the notes only upon the
satisfaction of specified conditions and during certain periods.
Thereafter, until the close of business on the second scheduled
trading day immediately preceding the maturity date, the notes will
be convertible at the option of the holders of notes at any time.
The notes will be convertible into cash, shares of EQT's common
stock or a combination thereof, at EQT's election.
EQT may redeem, for cash, all or any portion of the notes, at
its option, on or after May 5, 2023
if the last reported sale price of EQT's common stock has been at
least 130% of the conversion price for at least 20 trading days
(whether or not consecutive), including the trading day immediately
preceding the date on which EQT provides notice of redemption,
during any 30 consecutive trading day period ending on, and
including, the trading day immediately preceding the date on which
EQT provides notice of redemption, at a redemption price equal to
100% of the principal amount of the notes to be redeemed, plus
accrued and unpaid interest. If EQT undergoes a "fundamental
change" (as defined in the indenture governing the notes), holders
of the notes may require EQT to repurchase for cash all or any
portion of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest to, but excluding, the repurchase date. In
addition, upon certain corporate events or upon redemption, EQT
will, under certain circumstances, increase the conversion rate for
holders who convert notes in connection with such a corporate event
or redemption.
EQT estimates that the net proceeds from the offering will be
approximately $425.1 million (or
$483.2 million if the initial
purchasers exercise their option to purchase additional notes in
full), after deducting the initial purchasers' discounts and
estimated expenses payable by EQT. EQT intends to use a portion of
the net proceeds of the offering to pay the cost of the capped call
transactions described below. EQT intends to use the remainder of
the net proceeds to repay or redeem certain of its outstanding
indebtedness, including those with near-term maturities, and for
general corporate purposes. If the initial purchasers exercise
their option to purchase additional notes, EQT expects to use a
portion of the net proceeds from the sale of the additional notes
to enter into additional capped call transactions as described
below and the remainder to repay or redeem certain of its
outstanding indebtedness, including those with near-term
maturities, and for general corporate purposes.
In connection with the pricing of the notes, EQT entered into
privately negotiated capped call transactions with certain of the
initial purchasers or their respective affiliates (the "option
counterparties"). The capped call transactions are expected
generally to reduce the potential dilution to EQT's common stock
upon any conversion of notes at maturity and/or offset any cash
payments EQT is required to make in excess of the principal amount
of such converted notes, as the case may be, with such reduction
and/or offset subject to a cap initially equal to $18.75 per share (which represents a premium of
50% over the last reported sale price of EQT's common stock on the
NYSE on April 23, 2020).
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to EQT's common stock and/or purchase
shares of EQT's common stock concurrently with or shortly after the
pricing of the notes, and may unwind these various derivative
transactions and purchase shares of EQT's common stock in open
market transactions shortly following the pricing of the notes.
This activity could increase (or reduce the size of any decrease
in) the market price of EQT's common stock or the notes
concurrently with or shortly after the pricing of the notes.
In addition, the option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivative transactions with respect to EQT's
common stock and/or purchasing or selling EQT's common stock or
other securities of EQT in secondary market transactions following
the pricing of the notes and prior to the maturity of the notes
(and may do so following any conversion of notes, any repurchase of
notes on any fundamental change repurchase date, any notes
redemption date, or any other date on which any notes are retired
by EQT, in each case if EQT exercises the relevant election under
the capped call transactions). This activity could also cause or
avoid an increase or a decrease in the value of the notes or the
market price of EQT's common stock, which could affect a
noteholder's ability to convert its notes and, to the extent the
activity occurs during any observation period related to a
conversion of notes, it could affect the amount and value of the
consideration that a noteholder will receive upon conversion of its
notes.
Neither the notes, nor any shares of EQT's common stock issuable
upon conversion of the notes, have been, or will be, registered
under the Securities Act or any state securities laws, and unless
so registered, such securities may not be offered or sold in
the United States absent an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy these or any other securities and
shall not constitute an offer, solicitation or sale of these or any
other securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About EQT Corporation
EQT Corporation is a natural gas production company with
emphasis in the Appalachian Basin and operations throughout
Pennsylvania, West Virginia and Ohio. With 130 years of experience and a
long-standing history of good corporate citizenship, EQT is the
largest producer of natural gas in the
United States. As a leader in the use of advanced horizontal
drilling technology, EQT is committed to minimizing the impact of
drilling-related activities and reducing its overall environmental
footprint. Through safe and responsible operations, EQT is helping
to meet our nation's demand for clean-burning energy, while
continuing to provide a rewarding workplace and support for
activities that enrich the communities where its employees live and
work.
Cautionary Statements
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements that do not relate strictly to historical or
current facts are forward-looking. Without limiting the generality
of the foregoing, forward-looking statements contained in this
communication specifically include statements regarding the
expected closing of the sale of the notes, the anticipated use of
the net proceeds from the offering, the potential effects of the
capped call transactions and actions of the option counterparties
and their respective affiliates. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from projected results. Accordingly, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. The Company has based these
forward-looking statements on current expectations and assumptions
about future events, taking into account all information currently
available to the Company. While the Company considers these
expectations and assumptions to be reasonable, they are inherently
subject to significant business, economic, competitive, regulatory
and other risks and uncertainties, many of which are difficult to
predict and beyond the Company's control. The risks and
uncertainties that may affect the forward-looking statements
include, but are not limited to, those set forth under Item 1A,
"Risk Factors," of the Company's Annual Report on Form 10-K for the
year ended December 31, 2019, as
filed with the Securities and Exchange Commission (the "SEC") on
February 27, 2020, and as updated by
the Company's Current Report on Form 8-K that was filed with the
SEC on April 23, 2020, the Company's
subsequent Quarterly Reports on Form 10-Q, and other documents the
Company files from time to time with the SEC.
Any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by law.
Investor contact:
Andrew
Breese – Director, Investor Relations
412.395.2555
ABreese@eqt.com
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SOURCE EQT Corporation