Southwestern Energy Company (NYSE: SWN) (the “Company”) today
announced the early results and increase in the size of its
previously announced offers to purchase for cash (collectively, the
“Tender Offers” and each a “Tender Offer”) up to a maximum
aggregate purchase price (subject to the respective sub-caps and
Acceptance Priority Levels as set forth in the table below),
excluding accrued interest, equal to $900 million of the Company’s
4.10% senior notes due 2022 (the “2022 Notes”), 4.05% senior notes
due 2020 (the “2020 Notes”), 4.95% senior notes due 2025 (the “2025
Notes”), 7.50% senior notes due 2026 (the “2026 Notes”) and 7.75%
senior notes due 2027 (the “2027 Notes” and, together with the 2022
Notes, the 2020 Notes, the 2025 Notes and the 2026 Notes, the
“Notes”) and related Consent Solicitations (as defined below), upon
the terms and conditions described in the Company’s Offer to
Purchase and Consent Solicitation Statement dated September 4, 2018
(the “Offer to Purchase”). The maximum aggregate purchase price of
the Tender Offers, excluding accrued interest, has been increased
to $901,728,320, the amount sufficient to allow the purchase of
$900 million aggregate principal amount of Notes of the series
described below.
According to information received from Global Bondholder
Services Corporation (“GBSC”), the Tender Agent and Information
Agent for the Tender Offers and Consent Solicitations, as of 5:00
p.m., New York City time, on September 17, 2018 (that date and
time, the “Early Tender Time”), the Company had received valid
tenders from holders of the Notes as outlined in the table
below.
AggregatePrincipalAmountOutstanding
($)
Series of Notes
CUSIP / ISINNumber
Sub-Cap ($)
AcceptancePriority Level
Principal AmountTendered
($)
TotalConsiderationper
$1,000PrincipalAmount ofNotes
($)(1)(2)
FinalProrationFactor
4.10% Senior Notes due 2022
845467AF6;85467AH2/U84517AB4
$1,000,000,000 N/A 1 $787,210,000 $1,000.00 100.0% 4.05% Senior
Notes due 2020(3) 845467AK5 $91,557,000 N/A 2 $40,028,000 $1,025.00
100.0% 4.95% Senior Notes due 2025(3) 845467AL3 $1,000,000,000 N/A
3 $218,600,000 $1,010.00 33.4%(4) 7.50% Senior Notes due 2026
845467AM1 $650,000,000 $50,000,000 4 $76,373,000 $1,052.50 0% 7.75%
Senior Notes due 2027 845467AN9 $500,000,000 $50,000,000 5
$95,268,000 $1,060.00 0%
(1)
Does not include accrued interest, which
will also be payable as provided herein.
(2)
Includes the Early Tender Premium (as
defined below).
(3)
In February and June 2016, Moody’s and
S&P downgraded certain senior notes of the Company, increasing
the interest rates by 175 basis points effective July 2016. As a
result of these downgrades, the interest rate increased to 5.80%
for the 2020 Notes and to 6.70% for the 2025 Notes. In April and
May 2018, S&P and Moody’s upgraded certain senior notes,
decreasing the interest rates by 50 basis points effective July
2018. The first coupon payment to the bondholders at the lower
interest rate will be paid in January 2019. As a result of these
upgrades, the interest rate decreased to 5.30% for the 2020 Notes
and to 6.20% for the 2025 Notes. The first coupon payment to the
bondholders at the lower interest rate will be paid in January
2019.
(4)
Rounded to the nearest tenth of a
percentage point for presentation purposes.
Because the purchase of all Notes validly tendered in the Tender
Offers would cause the Company to purchase an aggregate principal
amount of Notes that would result in an aggregate purchase price,
excluding accrued interest, in excess of $901,728,320, subject to
the satisfaction or waiver of all conditions to the Tender Offers
described in the Offer to Purchase, the Company intends to accept
for purchase (a) all tendered 2022 Notes and 2020 Notes (b) only
$72,762,000 principal amount of 2025 Notes, and (c) none of the
2026 Notes and 2027 Notes. If accepted, the Company intends to pay
holders of 2025 Notes tendered on or prior to the Early Tender Time
on a pro rata basis according to the proration procedures described
in the Offer to Purchase.
Notes that have been validly tendered on or prior to the Early
Tender Time cannot be withdrawn, except as may be required by
applicable law. Because the Tender Offers were oversubscribed at
the Early Tender Time, holders of Notes who tender after the Early
Tender Time will not have any of their Notes accepted for purchase.
Any tendered Notes that are not accepted for purchase will be
returned or credited without expense to the holder’s account.
Holders of Notes that were validly tendered prior to the Early
Tender Time and that are accepted for purchase pursuant to the
applicable Tender Offer will receive the applicable Total
Consideration for each series of Notes as set forth in the table
above, which includes the early tender premium of $50.00 per $1,000
principal amount of Notes (the “Early Tender Premium”), together
with accrued and unpaid interest on such Notes from the last
interest payment date with respect to such Notes to, but not
including, the settlement date.
As part of the Tender Offers, the Company also solicited
consents (the “Consent Solicitations”) from the holders of Notes to
certain proposed amendments described in the Offer to Purchase to
remove certain restrictive covenants and events of default
contained in the indentures governing the Notes (the “Proposed
Amendments”). As of the Early Tender Time, holders of $787,210,000
aggregate principal amount of the 2022 Notes, representing
approximately 78.72% of the outstanding 2022 Notes had validly
tendered their 2022 Notes and were deemed to have delivered their
consents to the Proposed Amendments with respect to such series by
virtue of such tender. As a result, the number of consents required
to approve the Proposed Amendments with respect to the 2022 Notes
have been received, and such Proposed Amendments are expected to
become effective on or promptly following the date hereof upon the
execution of a supplemental indenture to the indenture governing
the 2022 Notes. The Proposed Amendments with respect to the 2022
Notes will not become operative until the Company consummates the
Tender Offer with respect to the 2022 Notes in accordance with its
terms and in a manner resulting in the purchase of all 2022 Notes
validly tendered prior to the Early Tender Time. The consents
required to approve the Proposed Amendments with respect to the
2020 Notes, the 2025 Notes, the 2026 Notes and the 2027 Notes were
not obtained by the Company and therefore the indentures governing
such Notes will not be amended and will remain in effect in their
present form.
The Tender Offers are not conditioned upon the tender of any
minimum principal amount of Notes of any series nor on the delivery
of a number of consents required to amend the indenture with
respect to each series of Notes. However, the Tender Offers and
Consent Solicitations are subject to, and conditioned upon, the
satisfaction or waiver of certain conditions described in the Offer
to Purchase, including the Company’s consummation of the sale under
the Membership Interest Purchase Agreement dated as of August 30,
2018, by and between the Company and Flywheel Energy Operating,
LLC, the Company’s subsidiary that owns and operates its
Fayetteville Shale exploration and production and related midstream
gathering assets (the “Fayetteville Sale”).
The Company intends to fund the Tender Offers, including accrued
and unpaid interest and fees and expenses payable in connection
with the Tender Offers, with proceeds from the Fayetteville
Sale.
The Tender Offers will each expire at 11:59 p.m., New York City
time, on October 1, 2018, unless extended or terminated by the
Company (the “Expiration Date”).
Citigroup Global Markets Inc. is the Lead Dealer Manager and
Lead Solicitation Agent in the Tender Offers and Consent
Solicitations and MUFG Securities Americas Inc., RBC Capital
Markets, LLC, SG Americas Securities, LLC and Wells Fargo
Securities, LLC are Co-Dealer Managers and Co-Solicitation Agents
in the Tender Offers and Consent Solicitations. GBSC has been
retained to serve as the Tender Agent and Information Agent for the
Tender Offers and Consent Solicitations. Persons with questions
regarding the Tender Offers and Consent Solicitations should
contact Citigroup Global Markets Inc. at (toll free) (800) 558-3745
or (collect) (212) 723-6106. 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.
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 Consent Solicitations 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 (NYSE: SWN) is an independent energy
company whose wholly-owned subsidiaries are engaged in natural gas,
natural gas liquids and oil exploration, development, production,
gathering and marketing. Additional information about the Company
is available at www.swn.com.
Forward-Looking Statements
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as “anticipate,”
“intend,” “plan,” “project,” “estimate,” “continue,” “potential,”
“should,” “could,” “may,” “will,” “objective,” “guidance,”
“outlook,” “effort,” “expect,” “believe,” “predict,” “budget,”
“projection,” “goal,” “forecast,” “target” or similar words.
Statements may be forward looking even in the absence of these
particular words. Where, in any forward-looking statement, the
company 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. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual
results of operations can and will be affected by a variety of
risks and other matters including, but not limited to, changes in
commodity prices; changes in expected levels of natural gas and oil
reserves or production, or the consummation of the Fayetteville
Sale; operating hazards, drilling risks, unsuccessful exploratory
activities; limited access to capital or significantly higher cost
of capital related to illiquidity or uncertainty in the domestic or
international financial markets; international monetary conditions;
unexpected cost increases; potential liability for remedial actions
under existing or future environmental regulations; potential
liability resulting from pending or future litigation; and general
domestic and international economic and political conditions; as
well as changes in tax, environmental and other laws applicable to
our business. Other factors that could cause actual results to
differ materially from those described in the forward-looking
statements include other economic, business, competitive and/or
regulatory factors affecting our business generally as set forth in
our filings with the Securities and Exchange Commission. Unless
legally required, Southwestern Energy Company undertakes no
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20180918005548/en/
Southwestern Energy CompanyRandall Barron, 832-796-4851Vice
President & Treasurerrandall_barron@swn.com
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