Southwestern Energy Company (NYSE: SWN) (the “Company”) today
announced that it has extended the Previous Expiration Date (as
defined below) for 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 $901,728,320 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 expiration
date applicable to the Tender Offers and the related Consent
Solicitations, previously scheduled for 11:59 p.m., New York City
time, on November 1, 2018 (the “Previous Expiration Date”), has
been extended to 11:59 p.m., New York City time, on December 3,
2018 (such date and time, as extended, the “New Expiration Date”),
unless further extended or earlier terminated.
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.
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”) and as of the Previous Expiration
Date, 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 ($)
AcceptancePriorityLevel
Principal AmountTendered as of
theEarly Tender Time ($)
TotalConsiderationper
$1,000PrincipalAmount ofNotes
($)(1)(2)
FinalProrationFactor
Principal AmountTendered after
theEarly Tender Timeand prior to
thePreviousExpiration Date ($)
4.10% Senior Notes due 2022
845467AF6;845467AH2/U84517AB4
$1,000,000,000 N/A 1 $787,210,000 $1,000.00 100.0% $289,000 4.05%
Senior Notes due 2020(3) 845467AK5 $91,557,000 N/A 2 $40,028,000
$1,025.00 100.0% $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) $511,000 7.50%
Senior Notes due 2026 845467AM1 $650,000,000 $50,000,000 4
$76,373,000 $1,052.50 0% $0 7.75% Senior Notes due 2027 845467AN9
$500,000,000 $50,000,000 5 $95,268,000 $1,060.00 0% $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.
As previously announced by the Company, because the purchase of
all Notes validly tendered in the Tender Offers prior to the Early
Tender Time 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 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, in each case
tendered prior to the Early Tender Time. If accepted, the Company
intends to pay holders of 2025 Notes tendered 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 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 tendered Notes after the Early
Tender Time and prior to the Previous Expiration Date, and who
tender Notes after the Previous Expiration Date and prior to the
New Expiration Date, will not have any of their Notes accepted for
purchase. Any tendered Notes that are not intended to be 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 effective, as
the Company has executed a supplemental indenture to the indenture
governing the 2022 Notes. However, 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.
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. Except as otherwise described in
this press release, the terms and conditions of the Tender Offers
and Consent Solicitations as described in the Offer to Purchase are
unchanged. 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 CompanySouthwestern 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 StatementsThis 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
(including geographic basis differentials); changes in expected
levels of natural gas and oil reserves or production, or the
Company’s ability to consummate the closing of the sale of its
Fayetteville Shale assets; operating hazards, drilling risks,
unsuccessful exploratory activities; natural disasters; 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 in service or other costs related to drilling and
completion activities; potential liability for remedial actions
under existing or future environmental regulations; failure to
obtain necessary regulatory approvals; 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, including court
rulings, 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/20181102005290/en/
Southwestern Energy CompanyRandall Barron, 832-796-4851Vice
President & Treasurerrandall_barron@swn.com
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