Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) intends to repurchase
US$748,009,000 aggregate principal amount (the “Revised Maximum
Amount”) of its debt as the result of successful cash tender offers
(the “Tender Offers”) for certain of its outstanding Notes (as
defined below) announced on June 4, 2019. The repurchase
demonstrates continued progress in deleveraging Cenovus’s balance
sheet.
The Tender Offers, originally for up to US$500,000,000 aggregate
principal amount (the “Maximum Amount”) of Cenovus’s 4.450% Notes
due 2042, 5.200% Notes due 2043, 3.000% Notes due 2022, 4.250%
Notes due 2027, 5.250% Notes due 2037, 5.400% Notes due 2047 and
3.800% Notes due 2023 (collectively, the “Notes”) were fully
subscribed, and the company has exercised its right to increase the
overall principal amount of the repurchase to
US$748,009,000.
Deleveraging remains a top priority for Cenovus after funding
its sustaining capital requirements and maintaining its current
dividend level. As a result of the company’s recent strong
operating and financial performance, Cenovus plans to use
internally generated cash to fund these Tender Offers.
The Tender Offers were made to all registered holders
(individually, a “Holder” and collectively, the “Holders”) of the
Notes upon the terms and subject to the conditions set forth in the
Offer to Purchase dated June 4, 2019 (as amended or supplemented
from time to time, including by this announcement, the “Offer to
Purchase”) and related Letter of Transmittal (the “Letter of
Transmittal” and, together with the Offer to Purchase, the “Offer
Documents”).
According to information received from D.F. King & Co., Inc.
(“DF King”), the Tender and Information Agent for the Tender
Offers, as of 5:00 p.m. New York City time, on June 17, 2019 (that
date and time, the “Early Tender Date”), Cenovus had received valid
tenders from Holders of the 4.450% Notes due 2042 and 5.200% Notes
due 2043 as outlined in the table below.
Title of Notes |
CUSIP/ISIN |
Principal Amount Outstanding |
Acceptance Priority Level |
Principal Amount Tendered |
Principal Amount Accepted |
Proration Factor |
4.450% Notes due 2042 |
15135UAH2/ US15135UAH23 |
US$673,825,000 |
1 |
US$505,561,000 |
US$505,561,000 |
100% |
5.200% Notes due 2043 |
15135UAK5/ US15135UAK51 |
US$300,174,000 |
2 |
US$242,448,000 |
US$242,448,000 |
100% |
Cenovus intends to accept for purchase US$748,009,000 aggregate
principal amount of Notes, which is the Revised Maximum Amount
validly tendered (and not validly withdrawn) on or before the Early
Tender Date, subject to the terms and conditions of the Tender
Offers having been either satisfied or waived by Cenovus. The Notes
will be purchased on the “Early Settlement Date”, which will be
determined at Cenovus’s option and is currently expected to occur
on June 19, 2019, subject to the terms and conditions of the Tender
Offers having been either satisfied or waived by Cenovus.
The amount of each series of Notes that is to be purchased on
the Early Settlement Date will be determined in accordance with the
acceptance priority levels and the proration procedures described
in the Offer Documents, subject to the Revised Maximum Amount. It
is expected that the 2042 Notes and the 2043 Notes accepted for
purchase will not be subject to proration and none of the 2022
Notes, the 2027 Notes, the 2037 Notes, the 2047 Notes or the 2023
Notes will be accepted for purchase. In addition, because the
Tender Offers were fully subscribed as of the Early Tender Date,
Holders who validly tender Notes after such date and on or before
the Expiration Date (as defined in the Offer Documents) will not
have any of their Notes accepted for purchase. Since the Withdrawal
Deadline (as defined in the Offer Documents) has passed, Notes
tendered pursuant to the Tender Offers may no longer be withdrawn,
except as required by law.
Notes tendered in the Tender Offers that have not been accepted
for purchase due to the acceptance priority levels will be returned
promptly to the tendering Holders.
Subject to the terms and conditions of the Tender Offers, the
applicable Total Consideration per US$1,000 principal amount of the
Notes will be an amount based on the yield to maturity of the U.S.
Treasury reference securities, as determined at 10:00 a.m. New York
City time, on June 18, 2019, unless otherwise extended as
described in the Offer to Purchase (the “Pricing Date”), plus a
fixed spread, calculated in accordance with the Offer
Documents.
Full details of the terms and conditions of the Tender Offers
are set forth in the Offer Documents, which are available from DF
King. Cenovus expressly reserves the right, in its sole discretion,
subject to applicable law, to amend or terminate the Tender Offers
at any time. The Tender Offers are not conditioned on any minimum
principal amount of Notes being tendered, but the Tender Offers are
subject to certain general conditions as described in the Offer to
Purchase.
Cenovus has retained Barclays Capital Inc. and MUFG Securities
Americas Inc. to act as Dealer Managers for the Tender Offers. DF
King has been retained to act as the Tender and Information Agent
for the Tender Offers. For additional information regarding the
terms of the Tender Offers, please contact Barclays Capital Inc. at
(800) 438-3242 (toll free) or (212) 528-7581 (collect) or MUFG
Securities Americas Inc. at (877) 744-4532 (toll-free) or (212)
405-7481 (collect). Requests for documents and questions regarding
the tendering of Notes may be directed to DF King either by email
at cve@dfking.com, or by phone (212) 269-5550 (for banks and
brokers only) or (866) 796-7182 (for all others toll free).
This news release does not constitute an offer to sell or
purchase, or a solicitation of an offer to sell or purchase, or the
solicitation of tenders with respect to, the Notes. No offer,
solicitation, purchase or sale will be made in any jurisdiction in
which such an offer, solicitation, or sale would be unlawful. The
Tender Offers are being made solely pursuant to the Offer to
Purchase and the related Letter of Transmittal made available to
Holders of the Notes. None of Cenovus, the Dealer Managers, the
Tender and Information Agent or the trustee with respect to the
Notes, or any of their respective affiliates, is making any
recommendation as to whether or not Holders should tender or
refrain from tendering all or any portion of their Notes in
response to the Tender Offers. Holders are urged to evaluate
carefully all information in the Offer to Purchase and the related
Letter of Transmittal, consult their own investment and tax
advisers and make their own decisions whether to tender Notes in
the Tender Offers, and, if so, the principal amount of Notes to
tender.
Forward-Looking InformationThis document
contains certain forward-looking statements and other information
(collectively “forward-looking information”) about Cenovus’s
current expectations, estimates and projections, made in light of
the company’s experience and perception of historical trends.
Forward-looking statements include statements regarding the terms
and timing for completion of the Tender Offers, including the
acceptance for purchase of any Notes validly tendered and the
expected Early Settlement Date and the Expiration Date; the
satisfaction or waiver of certain conditions of the Tender Offers;
and Cenovus’s plan to use internally generated cash for these
Tender Offers. Forward-looking information in this document is
identified by words such as “believe”, “expect”, “plan”, “should”,
“potential”, “capacity”, “strategy”, “target”, “focus” or similar
expressions and includes suggestions of future outcomes, including
statements about Cenovus’s strategy.
Readers are cautioned not to place undue reliance on
forward-looking information as the company’s actual results may
differ materially from those expressed or implied.
Developing forward-looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, some of which are specific to Cenovus and others
that apply to the industry generally. The factors or assumptions on
which the forward-looking information is based include: the
successful and timely completion of the Tender Offers, and other
risks and uncertainties described from time to time in the filings
Cenovus makes with securities regulatory authorities.
Readers are cautioned that the foregoing lists are not
exhaustive and are made as at the date hereof. For a full
discussion of Cenovus’s material risk factors, see “Risk Management
and Risk Factors” in Cenovus’s most recent annual and quarterly
Management’s Discussion & Analysis (MD&A), and risk factors
described in other documents Cenovus files from time to time with
securities regulatory authorities, all of which are available on
SEDAR at sedar.com and EDGAR at sec.gov.
Cenovus Energy Inc.Cenovus Energy Inc. is a
Canadian integrated oil and natural gas company. It is committed to
maximizing value by responsibly developing its assets in a safe,
innovative and efficient way. Operations include oil sands projects
in northern Alberta, which use specialized methods to drill and
pump the oil to the surface, and established natural gas and oil
production in Alberta and British Columbia. The company also has
50% ownership in two U.S. refineries. Cenovus shares trade under
the symbol CVE, and are listed on the Toronto and New York stock
exchanges.
CENOVUS
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