SM Energy Announces Put Option Notification for 3.50% Senior Convertible Notes Due 2027
March 05 2012 - 7:45AM
Business Wire
SM Energy Company (NYSE:SM) (the “Company”) today announced that
it is notifying holders of its 3.50% Senior Convertible Notes due
2027 (the “Notes”) that the holders have the right, pursuant to the
terms of the indenture governing the Notes, to require the Company
to repurchase all or a portion of their Notes (the “Put Right”).
The Company has elected to repurchase any Notes for which holders
properly exercise their Put Right for cash. The Put Right expires
at 5:00 p.m., New York City time, on Friday, March 30, 2012.
As required by rules of the United States Securities and
Exchange Commission, the Company will file a Tender Offer Statement
on Schedule TO today. In addition, documents specifying the terms,
conditions and procedures for exercising the Put Right will be
available through the Depository Trust Company and the paying
agent, which is Wells Fargo Bank, N.A. None of the Company, its
board of directors, or its employees has made or is making any
representation or recommendation to any holder as to whether to
exercise or refrain from exercising the Put Right. The Put Right
entitles each holder of the Notes to require the Company to
repurchase all or a part of such holder's Notes in principal
amounts equal to $1,000 or integral multiples of $1,000. The
purchase price for such Notes will be equal to 100% of the
principal amount of the Notes, plus any accrued and unpaid interest
up to, but not including April 1, 2012 (the “Repurchase Date”),
upon the terms and subject to the conditions set forth in the Notes
and the indenture governing the Notes. The Repurchase Date is an
interest payment date under the terms of the Notes. Accordingly, on
April 2, 2012, the business day immediately following the
Repurchase Date, the Company will pay accrued and unpaid interest
on all of the Notes through March 31, 2012, to all holders who
were holders of record on March 15, 2012, regardless of
whether the Put Right is exercised with respect to such Notes. On
the Repurchase Date, there will be no accrued and unpaid interest
on the Notes. As of March 2, 2012, there was $287,500,000 in
aggregate principal amount of the Notes outstanding. If all
outstanding Notes are surrendered for repurchase pursuant to the
Put Option, the aggregate cash purchase price will be $287,500,000.
The Company intends to use available cash to fund the purchase of
any Notes with respect to which a holder has validly exercised the
Put Right.
The Notes will be convertible, in certain circumstances, into
shares of the Company's common stock, or, at the Company's election
into cash or a combination of cash and shares. Any conversion into
shares of the Company's common stock will be based on an initial
conversion rate of 18.3757 shares of the Company's common stock per
$1,000 principal amount of Notes. On February 29, 2012, the closing
sales price of the Company's common stock was $78.72 per share.
The opportunity for holders of the Notes to exercise the Put
Right commences today, March 5, 2012, and will terminate at 5:00
p.m. New York City time, on March 30, 2012. In order to exercise
the Put Right, a holder must follow the transmittal procedures set
forth in the Company's Put Right Notice to holders (the “Put Right
Notice”), which is available through the Depository Trust Company
and Wells Fargo Bank, N.A. Holders may withdraw any previously
tendered Notes pursuant to the terms of the Put Right at any time
prior to 5:00 p.m. New York City time, on March 30, 2012 or as
otherwise provided by applicable law.
This press release is for information only and is not an offer
to purchase, a solicitation of an offer to purchase, or a
solicitation of an offer to sell securities of SM Energy Company.
The offer to purchase the Notes will be only pursuant to, and the
Notes may be tendered only in accordance with the Company's Put
Right Notice dated March 5, 2012 and related documents. Holders of
Notes may request the Company's Put Right Notice from the paying
agent, Wells Fargo Bank, N.A.
By Registered & Certified Mail:
By Regular Mail & Overnight Courier:
By Telephone: WELLS FARGO BANK, N.A.
Corporate Trust Operations
MAC N9303-121
PO Box 1517
Minneapolis, MN 55480
WELLS FARGO BANK, N.A.
Corporate Trust Operations
MAC N9303-121
Sixth & Marquette Avenue
Minneapolis, MN 55479
(800) 344-5128
HOLDERS OF NOTES AND OTHER INTERESTED PARTIES ARE URGED TO READ
THE COMPANY'S SCHEDULE TO, PUT RIGHT NOTICE AND OTHER RELEVANT
DOCUMENTS FILED WITH THE UNITED STATED SECURITIES AND EXCHANGE
COMMISSION (“SEC”) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SM ENERGY COMPANY AND THE PUT
RIGHT.
Materials filed with the SEC will be available electronically
without charge at the SEC's website, www.sec.gov. Documents filed with the SEC may also
be obtained without charge at SM Energy's website, www.sm-energy.com.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in
the acquisition, exploration, development, and production of crude
oil, natural gas, and natural gas liquids in onshore North America.
SM Energy routinely posts important information about the
Company on its website. For more information about SM Energy,
please visit its website at www.sm-energy.com.
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