Southwestern Energy Announces Extension of Cash Tender Offers and Consent Solicitations for Senior Notes
Southwestern Energy Company (NYSE: SWN) (the “Company”) today announced
that it has extended the Original 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 $901,728,320 of the Company’s 4.10% senior notes due
2022 (the “2022 Notes”), 4.05% senior notes due 2020 (the “2020 Notes”),
4.95% senior notes due 2025 (the “2025 Notes”), 7.50% senior notes due
2026 (the “2026 Notes”) and 7.75% senior notes due 2027 (the “2027
Notes” and, together with the 2022 Notes, the 2020 Notes, the 2025 Notes
and the 2026 Notes, the “Notes”) and related Consent Solicitations (as
defined below), upon the terms and conditions described in the Company’s
Offer to Purchase and Consent Solicitation Statement dated September 4,
2018 (the “Offer to Purchase”). The expiration date applicable to the
Tender Offers and the related Consent Solicitations, previously
scheduled for 11:59 p.m., New York City time, on October 1, 2018 (the
“Original Expiration Date”), has been extended to 11:59 p.m., New York
City time, on November 1, 2018 (such date and time, as extended, the
“New Expiration Date”), unless further extended or earlier terminated.
According to information received from Global Bondholder Services
Corporation (“GBSC”), the Tender Agent and Information Agent for the
Tender Offers and Consent Solicitations, as of 5:00 p.m., New York City
time, on September 17, 2018 (that date and time, the “Early Tender
Time”) and as of the Original Expiration Date, the Company had received
valid tenders from holders of the Notes as outlined in the table below.
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Series of Notes
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CUSIP / ISIN Number
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Aggregate Principal Amount Outstanding ($)
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Sub-Cap ($)
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Acceptance Priority Level
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Principal Amount Tendered as of the Early
Tender Time ($)
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Total Consideration per $1,000 Principal Amount
of Notes ($)(1)(2)
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Final Proration Factor
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Principal Amount Tendered after the
Early Tender Time and prior to the Original Expiration
Date ($)
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4.10% Senior Notes due 2022
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845467AF6; 845467AH2/ U84517AB4
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$1,000,000,000
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N/A
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1
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$787,210,000
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$1,000.00
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100.0%
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$10,000
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4.05% Senior Notes due 2020(3)
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845467AK5
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$91,557,000
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N/A
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2
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$40,028,000
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$1,025.00
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100.0%
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$0
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4.95% Senior Notes due 2025(3)
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845467AL3
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$1,000,000,000
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N/A
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3
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$218,600,000
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$1,010.00
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33.4%(4)
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$9,000
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7.50% Senior Notes due 2026
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845467AM1
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$650,000,000
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$50,000,000
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4
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$76,373,000
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$1,052.50
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0%
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$0
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7.75% Senior Notes due 2027
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845467AN9
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$500,000,000
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$50,000,000
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5
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$95,268,000
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$1,060.00
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0%
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$0
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(1)
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Does not include accrued interest, which will also be payable as
provided herein.
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(2)
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Includes the Early Tender Premium (as defined below).
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(3)
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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.
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(4)
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Rounded to the nearest tenth of a percentage point for presentation
purposes.
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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 Original Expiration Date, and who tender Notes after the
Original 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.
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.
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 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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