Southwestern Energy Company (NYSE: SWN) (the “Company”) today
announced that it has commenced offers to purchase for cash
(collectively, the “Tender Offers” and each a “Tender Offer”) its
outstanding senior notes listed in the table below and the 2026
Consent Solicitation (as defined below), subject to the terms and
conditions described in the Company’s Offer to Purchase dated
August 16, 2021 (the “Offer to Purchase”).
Aggregate Principal Amount
Outstanding (U.S. $)
Dollars per U.S. $1,000
Principal Amount of Notes
Title of Notes
CUSIP Number/ISIN
Tender Offer Consideration(1)
(U.S. $)
Early Tender Premium (U.S.
$)
Total Consideration(1,2) (U.S.
$)
7.50% Senior Notes due 2026
845467AM1
$617,622,000
$1,030
$30
$1,060
4.95% Senior Notes due 2025(3,4)
845467AL3
$856,454,000
$1,065
$30
$1,095
(1)
Does not include accrued interest, which
will also be payable as provided herein.
(2)
Includes the Early Tender Premium.
(3)
On April 7, 2020, S&P downgraded the
Company’s bond rating to BB-, which had the effect of increasing
the interest rate on the 2025 Notes to 6.45% following the July 23,
2020 interest payment date. The first coupon payment to the holders
of the 2025 Notes at the higher interest rate was paid in January
2021.
(4)
The Maximum Aggregate Principal Amount (as
defined below) for the 2025 Notes (subject to increase by the
Company) will be $25,000,000.
Specifically, the Company is offering to purchase any and all
7.50% Senior Notes due 2026 (the “2026 Notes”) and a maximum
aggregate principal amount of up to $25,000,000 (as it may be
increased by the Company, the “Maximum Aggregate Principal Amount”)
of the 4.95% Senior Notes due 2025 (the “2025 Notes and, together
with the 2026 Notes, the “Notes”). The Tender Offer for the 2026
Notes is referred to herein as the “Any and All Tender Offer” and
the Tender Offer for the 2025 Notes is referred to as herein the
“Maximum Tender Offer”.
The Company intends to purchase any and all 2026 Notes validly
tendered (and not validly withdrawn). The amount of 2025 Notes that
is purchased in the Maximum Tender Offer on the applicable
settlement date will be subject to the proration arrangements
applicable to the Maximum Tender Offer.
The Tender Offers will expire at 11:59 p.m., New York City time,
at the end of the day on September 13, 2021, unless extended or
terminated by the Company (the “Expiration Date”). No tenders
submitted after the Expiration Date will be valid. Holders of Notes
that are validly tendered (and not validly withdrawn) at or prior
to 5:00 p.m., New York City time, on August 27, 2021 (subject to
extension, the “Early Tender Time”) pursuant to the applicable
Tender Offer will be eligible to receive the total consideration
that includes the early tender premium for such series of Notes set
forth in the table above (the “Early Tender Premium” and, together
with the applicable Tender Offer Consideration (as defined below),
the “Total Consideration”) for each $1,000 principal amount of
their Notes accepted for purchase pursuant to the applicable Tender
Offer. Holders of Notes validly tendering their Notes after the
Early Tender Time will not be eligible to receive the Early Tender
Premium and will be eligible to receive only the applicable tender
offer consideration set forth in the above table (with respect to
each series of Notes, the “Tender Offer Consideration”) for each
$1,000 principal amount of their Notes accepted for purchase
pursuant to the applicable Tender Offer. All Notes accepted for
purchase pursuant to the Tender Offers will also receive accrued
and unpaid interest on such Notes from the last interest payment
date with respect to those Notes to, but not including, the
applicable settlement date.
As part of the Tender Offers, the Company is also soliciting
consents (the “2026 Consent Solicitation”) from the holders of the
2026 Notes for certain proposed amendments that would, among other
things, eliminate certain of the restrictive covenants and certain
events of default and reduce the optional redemption notice period
under the indenture governing the 2026 Notes (the “2026 Proposed
Amendments”). Adoption of the 2026 Proposed Amendments requires the
consent of the holders of at least a majority of the outstanding
principal amount of the 2026 Notes (the “Requisite Consents”). Each
holder tendering 2026 Notes will be deemed to have consented to the
2026 Proposed Amendments with respect to all 2026 Notes tendered,
and holders of 2026 Notes may not deliver consents to the 2026
Proposed Amendments without tendering their 2026 Notes. If the 2026
Proposed Amendments become operative with respect to the 2026
Notes, holders of the 2026 Notes that do not tender their 2026
Notes at or prior to the Expiration Date, or at all, will be bound
by the 2026 Proposed Amendments, meaning that the 2026 Notes will
no longer have the benefit of the existing terms of certain
covenants and certain events of default contained in the indenture
governing the 2026 Notes and will have a shorter optional
redemption notice period. In addition, such holders that do not
tender their 2026 Notes at or prior to the Expiration Date, or at
all, will not receive either the Tender Offer Consideration or the
Early Tender Premium.
Notes that have been tendered may be withdrawn from the
applicable Tender Offer prior to 5:00 p.m., New York City time, on
August 27, 2021 (subject to extension, the “Withdrawal Deadline”).
Holders of Notes tendered after the Withdrawal Deadline cannot
withdraw their Notes unless the Company is required to extend
withdrawal rights under applicable law. In the case of the 2026
Notes, any withdrawal of 2026 Notes will also revoke the related
consent to the 2026 Proposed Amendments. The Company reserves the
right, but is under no obligation, to increase the Maximum
Aggregate Principal Amount at any time, subject to applicable law.
If the Company increases the Maximum Aggregate Principal Amount, it
does not expect to extend the applicable Withdrawal Deadline,
subject to applicable law.
The Company reserves the right, but is under no obligation,
subject to the satisfaction or waiver of the conditions to the
Tender Offers, to accept for purchase any or all of the 2026 Notes
validly tendered (and not validly withdrawn) and to accept for
purchase validly tendered (and not validly withdrawn) 2025 Notes up
to the Maximum Aggregate Principal Amount, in each case at or prior
to the Early Tender Time, at any point following the Early Tender
Time and at or prior to the Expiration Date (the “Early Settlement
Date”). The Early Settlement Date will be determined at the
Company’s option and is currently expected to occur on August 31,
2021, the second business day following the Early Tender Time,
subject to all conditions to any of the Tender Offers having been
either satisfied or waived by the Company. If the Company elects to
have an Early Settlement Date, it will accept any or all of the
2026 Notes validly tendered (and not validly withdrawn) at or prior
to the Early Tender Time and will accept validly tendered (and not
validly withdrawn) 2025 Notes up to the Maximum Aggregate Principal
Amount. The final settlement date is expected to occur on September
15, 2021, the second business day following the Expiration
Date.
Acceptance of tenders of the 2025 Notes may be subject to
proration if the aggregate principal amount for all such 2025 Notes
validly tendered is greater than the Maximum Aggregate Principal
Amount. Furthermore, if the Maximum Tender Offer is fully
subscribed as of the Early Tender Time, Holders who validly tender
2025 Notes after the Early Tender Time will not have any of their
2025 Notes accepted for purchase. The Tender Offers are not
conditioned on the tender of any minimum principal amount of Notes,
the consummation of any other Tender Offer in respect of any other
series of Notes or (except for the effectiveness of the 2026
Proposed Amendments) obtaining any Requisite Consent. However, the
Tender Offers and the 2026 Consent Solicitation are subject to, and
conditioned upon, the satisfaction or waiver of certain conditions
described in the Offer to Purchase, including the Company having
received proceeds from a substantially concurrent debt financing of
at least $1 billion aggregate principal amount (the “Financing”.)
The Company reserves the right to waive the any conditions to the
Tender Offers and, subject to applicable law, to modify or
terminate the Tender Offers or the 2026 Consent Solicitation.
The Company expects to pay the Total Consideration for the
Tender Offers with the net proceeds from the Financing. Assuming
that all of the 2026 Notes are tendered at or prior to the Early
Tender Time and the Maximum Tender Offer is fully subscribed as of
the Early Tender Time, the Company estimates that it would need
approximately $684 million to pay the Total Consideration plus
related fees and expenses, not including the Accrued Interest, for
tendered Notes.
The purpose of the Tender Offers is to purchase the Notes, thus
retiring debt. The purpose of the 2026 Consent Solicitation is to
obtain Requisite Consents to adopt the 2026 Proposed Amendments
with respect to the indenture governing the 2026 Notes.
Citigroup Global Markets Inc. and BofA Securities, Inc. are the
Lead Dealer Managers and Lead Solicitation Agents in the Tender
Offers and the 2026 Consent Solicitation and Credit Agricole
Securities (USA) Inc., MUFG Securities Americas Inc., RBC Capital
Markets, LLC and Wells Fargo Securities, LLC are Co-Dealer Managers
and Co-Solicitation Agents in the Tender Offers and the 2026
Consent Solicitation. Global Bondholder Services Corporation has
been retained to serve as the Tender Agent and Information Agent
for the Tender Offers and the 2026 Consent Solicitation. Persons
with questions regarding the Tender Offers and the 2026 Consent
Solicitation should contact Citigroup Global Markets Inc. at (toll
free) (800) 558-3745 or (collect) (212) 723-6106 and BofA
Securities, Inc. at (collect) (980) 388-3646. Requests for the
Offer to Purchase should be directed to Global Bondholder Services
Corporation at (toll free) (866) 807-2200 or by email to
contact@gbsc-usa.com.
None of the Company, the Dealer Managers and Solicitation
Agents, the Tender and Information Agent, the trustees or any of
their respective affiliates (x) makes any recommendation that
Holders tender or refrain from tendering all or any portion of the
principal amount of their Notes and delivering any related
Consents, and no one has been authorized by any of them to make
such a recommendation or (y) except as expressly set forth herein
with respect to the Company, the Dealer Managers and Solicitation
Agents, the Tender and Information Agent or any of their respective
affiliates, makes any representations or warranties. The trustees
do not assume any responsibility for the accuracy or completeness
of the information concerning the Company, its affiliates or the
Notes contained herein or any failure by the Company to disclose
events that may have occurred and may affect the significance or
accuracy of that information. Holders must make their own decision
as to whether to tender their Notes and deliver related consents,
and, if so, the principal amount of Notes as to which action is to
be taken.
This news release shall not constitute an offer to sell, a
solicitation to buy or an offer to purchase or sell any securities.
The Tender Offers and the 2026 Consent Solicitation are being made
only pursuant to the Offer to Purchase and only in such
jurisdictions as is permitted under applicable law. In any
jurisdiction in which the Tender Offers are required to be made by
a licensed broker or dealer, the Tender Offers will be deemed to be
made on behalf of the Company by the Dealer Managers, or one or
more registered brokers or dealers that are licensed under the laws
of such jurisdiction.
About Southwestern Energy Company
Southwestern Energy Company is
a leading U.S. producer of natural gas and natural gas liquids
focused on responsibly developing large-scale energy assets in the
nation’s most prolific shale gas basins. SWN’s returns-driven
strategy strives to create sustainable value for its stakeholders
by leveraging its scale, financial strength and operational
execution.
Forward-Looking Statements
Certain statements and information in this news release may
constitute “forward-looking statements.” Forward-looking statements
relate to future events, including, but not limited to the Tender
Offers, the 2026 Consent Solicitation and the Financing. The words
“believe,” “expect,” “anticipate,” “plan,” “predict,” “intend,”
“seek,” “foresee,” “should,” “would,” “could,” “attempt,”
“appears,” “forecast,” “outlook,” “estimate,” “project,”
“potential,” “may,” “will,” “likely,” “guidance,” “goal,” “model,”
“target,” “budget” and other similar expressions are intended to
identify forward-looking statements, which are generally not
historical in nature. Statements may be forward looking even in the
absence of these particular words. Where, in any forward-looking
statement, Southwestern Energy expresses an expectation or belief
as to future results, such expectation or belief is expressed in
good faith and believed to have a reasonable basis. Management
cautions you that the forward-looking statements contained herein
are not guarantees of future performance, and we cannot assure you
that such statements will be realized or that the events and
circumstances they describe will occur. Factors that could cause
actual results to differ materially from those anticipated or
implied in the forward-looking statements herein include, but are
not limited to: the timing and extent of changes in market
conditions and prices for natural gas, oil and natural gas liquids,
including regional basis differentials and the impact of reduced
demand for our production and products in which our production is a
component due to governmental and societal actions taken in
response to COVID-19 or other public health crises and any related
company or governmental policies and actions to protect the health
and safety of individuals or governmental policies or actions to
maintain the functioning of national or global economies and
markets; our ability to fund our planned capital investments; a
change in our credit rating, an increase in interest rates and any
adverse impacts from the discontinuation of the London Interbank
Offered Rate; the extent to which lower commodity prices impact our
ability to service or refinance our existing debt; the impact of
volatility in the financial markets or other global economic
factors; difficulties in appropriately allocating capital and
resources among our strategic opportunities; the timing and extent
of our success in discovering, developing, producing and estimating
reserves; our ability to maintain leases that may expire if
production is not established or profitably maintained; our ability
to transport our production to the most favorable markets or at
all; the impact of government regulation, including changes in law,
the ability to obtain and maintain permits, any increase in
severance or similar taxes, and legislation or regulation relating
to hydraulic fracturing, climate and over-the-counter derivatives;
the impact of the adverse outcome of any material litigation
against us or judicial decisions that affect us or our industry
generally; the effects of weather; increased competition; the
financial impact of accounting regulations and critical accounting
policies; the comparative cost of alternative fuels; credit risk
relating to the risk of loss as a result of non-performance by our
counterparties; and any other factors listed in the reports we have
filed and may file with the Securities and Exchange Commission that
are incorporated by reference herein. All written and oral
forward-looking statements attributable to us are expressly
qualified in their entirety by this cautionary statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210816005323/en/
Investor Contacts Brittany Raiford Director, Investor
Relations (832) 796-7906 brittany_raiford@swn.com
Bernadette Butler Investor Relations Advisor (832) 796-6079
bernadette_butler@swn.com
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