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”) up to
$250,000,000 aggregate principal amount of its outstanding senior
notes listed in the table below, subject to the terms and
conditions described in the Company’s Offer to Purchase dated
November 23, 2021 (the “Offer to Purchase”).
Dollars per U.S. $1,000
Principal Amount of Notes
Title of Notes
CUSIP Number
Aggregate Principal Amount
Outstanding (U.S. $)
Acceptance Priority
Level
Tender Offer Consideration(1)
(U.S. $)
Early Tender Premium (U.S.
$)
Total Consideration(1)(2)
(U.S. $)
2025 Notes(3)
4.95% Senior Notes due 2025
845467AL3
$689,454,000
1
$1,075
$30
$1,105
2027 Notes:
7.75% Senior Notes due 2027
845467AN9
$440,007,000
2
$1,060
$30
$1,090
(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. Following the closing of Southwestern’s acquisition of Indigo
Natural Resources LLC, S&P upgraded the Company’s bond rating
to BB, which had the effect of decreasing the interest rate on the
2025 Notes to 6.20%, beginning with coupon payments paid after
January 2022. On November 4, 2021 S&P placed the Company on
CreditWatch Positive for an upgrade to BB+ upon closing of the GEPH
Merger (as defined below), assuming no changes to their
assumptions. This ratings upgrade, if received, would result in a
further reduction on the interest rate on the 2025 Notes to 5.95%
beginning with coupon payments paid after January 2022.
Specifically, the Company is offering to purchase for cash (i)
its 4.95% Senior Notes due 2025 (the “2025 Notes”) and (ii) its
7.75% Senior Notes due 2027 (the “2027 Notes” and, together with
the 2025 Notes, the “Notes”) in an aggregate principal amount of up
to $250,000,000 (the “Maximum Tender Amount”) and, with respect to
the 2027 Notes, subject to a maximum principal amount equal to the
lesser of (x) the Maximum Tender Amount minus the principal amount
of 2025 Notes tendered at or prior to the Expiration Date and (y)
$100,000,000 (the “2027 Tender Sub Cap”), at the respective
purchase prices set forth below. As a result of the 2027 Tender Sub
Cap and the proration provisions described below, and subject to
any of the conditions contained in the Offer to Purchase, any 2025
Notes validly tendered in the Tender Offers will be accepted in
priority to 2027 Notes tendered in the Tender Offers.
The Company intends to purchase up to the Maximum Tender Amount,
subject to the 2027 Tender Sub Cap, of the 2025 Notes and the 2027
Notes validly tendered (and not validly withdrawn), subject to the
conditions contained within the Offer to Purchase. If the principal
amount of 2025 Notes tendered exceeds the Maximum Tender Amount at
the Expiration Date (as defined below), including the 2025 Notes
tendered at the Early Tender Time, all of the 2025 Notes tendered
will be subject to proration based on the total principal amount of
2025 Notes tendered at or prior to the Expiration Date. In
addition, if the Maximum Tender Amount is met or exceeded by the
aggregate principal amount of tendered 2025 Notes, the Company will
not purchase any 2027 Notes. If the principal amount of 2025 Notes
does not exceed the Maximum Tender Amount at the Expiration Date,
all of the 2027 Notes tendered, subject to the 2027 Tender Sub Cap,
will be subject to proration based on the total principal amount of
2027 Notes tendered at or prior to the Expiration Date.
The Tender Offers will expire at 5:00 p.m., New York City time,
on December 29, 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 December 7, 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 settlement date.
Notes that have been tendered may be withdrawn from the
applicable Tender Offer prior to 5:00 p.m., New York City time, on
December 7, 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. The Company reserves the
right, but is under no obligation, to increase the Maximum Tender
Amount and/or 2027 Tender Sub Cap at any time, subject to
applicable law. If the Company increases the Maximum Tender Amount
and/or 2027 Tender Sub Cap, it does not expect to extend the
applicable Withdrawal Deadline, subject to applicable law.
The settlement date is expected to occur on December 30, 2021,
the first business day following the Expiration Date.
The Tender Offers are not conditioned on the tender of any
minimum principal amount of Notes or the consummation of the other
Tender Offer in respect of any other series of Notes. However, the
Tender Offers 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
one or more debt financings of at least $1.65 billion aggregate
principal amount (the “Financing”) and completion of the merger of
GEP Haynesville, LLC (“GEPH”) with and into a subsidiary of
Southwestern (the “Merger Condition”), with GEPH surviving the
merger (the “GEPH Merger”). 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.
The purpose of the Tender Offers is to purchase the Notes, thus
retiring debt.
RBC Capital Markets, LLC and Wells Fargo Securities, LLC are the
Lead Dealer Managers in the Tender Offers and BofA Securities,
Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC and
MUFG Securities Americas Inc. are Co-Dealer Managers in the Tender
Offers. Global Bondholder Services Corporation has been retained to
serve as the Tender Agent and Information Agent for the Tender
Offers. Persons with questions regarding the Tender Offers should
contact RBC Capital Markets, LLC at (toll free) (877) 381-2099 or
(collect) (212) 618-7843 and Wells Fargo Securities, LLC at (toll
free) (866) 309-6316 or (collect) (704) 410-4756. 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, the Tender and
Information Agent, the trustees or any of their respective
affiliates (x) makes any recommendation that holders of Notes
tender or refrain from tendering all or any portion of the
principal amount of their Notes, 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, 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 of Notes
must make their own decision as to whether to tender their Notes,
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 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 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:
completion of the GEPH Merger; 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 realize the expected benefits from acquisitions; costs in
connection with acquisitions and transactions contemplated thereby;
integration of operations and results subsequent to acquisitions;
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20211123006155/en/
Investor Contacts Brittany Raiford Director, Investor
Relations (832) 796-7906 brittany_raiford@swn.com
Southwestern Energy (NYSE:SWN)
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