Analyst Summary
- Chord Energy Corporation completed an offering of $750 million in aggregate principal amount of its 6.750% senior unsecured notes due 2033.
- The net proceeds were used to purchase $366,342,000 of the Company’s 6.375% senior unsecured notes due 2026 tendered in the previously announced cash tender offer.
- Remaining proceeds will be used to redeem any and all of the remaining 2026 Notes that were not purchased in the Tender Offer, on or about June 1, 2025, repay a portion of its borrowings outstanding under the Company’s senior secured revolving credit facility, and pay all fees and expenses associated with each of the Tender Offer, the 2026 Notes Redemption and the Credit Facility.
- The company may redeem up to 40% of the notes prior to March 15, 2028 at a redemption price of 106.750% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, in an amount not greater than the net proceeds of certain equity offerings.
- The company may redeem some or all of the notes for cash prior to March 15, 2028 at a redemption price equal to 100% of the principal amount thereof plus an applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date.
- The company must offer to repurchase the notes if it experiences specific kinds of changes of control or sells assets under certain circumstances.
- The indenture restricts the Company’s ability and the ability of certain of its subsidiaries to: (i) make investments; (ii) incur indebtedness or issue preferred stock; (iii) create liens; (iv) sell assets; (v) enter into agreements that restrict dividends or other payments by restricted subsidiaries; (vi) consolidate, merge or transfer all or substantially all of the assets of the Company; (vii) engage in transactions with affiliates; (viii) pay dividends or make other distributions on capital stock or prepay subordinated indebtedness; and (ix) create unrestricted subsidiaries.
Potential Implications
Company Performance
- The debt restructuring could improve the company’s financial flexibility by extending debt maturities.
- Repaying a portion of the credit facility could reduce interest expenses.
Stock Price
- Successful debt management could positively influence investor confidence.
- The terms of the new notes and redemption options may affect the stock’s attractiveness.