Southwestern Energy Company (NYSE: SWN) (the “Company”) today
announced that it has commenced offers to purchase for cash
(collectively, the “Tender Offers” and each a “Tender Offer”) its
outstanding senior notes listed in the table below and Consent
Solicitations (as defined below), upon the terms and conditions
described in the Company’s Offer to Purchase dated September 4,
2018 (the “Offer to Purchase”).
AggregatePrincipalAmount Outstanding ($)
Dollars per $1,000 PrincipalAmount
of Notes Series of Notes
CUSIPNumber
Sub-Cap ($)
AcceptancePriorityLevel
Tender
OfferConsideration($)
EarlyTenderPremium($)
TotalConsideration(1)(2)($)
4.10% Senior Notes due 2022 845467AF6; 845467AH2/ U84517AB4
$1,000,000,000 N/A 1 $950.00 $50.00 $1,000.00 4.05%
Senior Notes due 2020(3) 845467AK5 $91,557,000 N/A 2 $975.00 $50.00
$1,025.00 4.95% Senior Notes due 2025(3) 845467AL3 $1,000,000,000
N/A 3 $960.00 $50.00 $1,010.00 7.50% Senior Notes due 2026
845467AM1 $650,000,000 $50,000,000 4 $1,002.50 $50.00 $1,052.50
7.75% Senior Notes due 2027 845467AN9 $500,000,000 $50,000,000 5
$1,010.00 $50.00 $1,060.00 (1)
Does not include accrued interest, which will also be
payable to but not including the applicable settlement date. (2)
Includes the applicable Early Tender Premium. (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.
The Company is offering to purchase up to a maximum aggregate
purchase price subject to the respective Sub-Caps (as defined
below) and priorities (as described below), excluding accrued
interest, equal to $900 million (subject to increase by the
Company, the “Maximum Aggregate Purchase Price”) 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”).
Subject to the Maximum Aggregate Purchase Price and the
respective Sub-Caps (subject to increase by the Company), the
amount of a series of Notes that is purchased in the Tender Offers
on the settlement date will be based on the order of priority (the
“Acceptance Priority Level”) for such series of Notes as set forth
in the table above, subject to the proration arrangements
applicable to the Tender Offers. Subject to the Maximum Aggregate
Purchase Price, the maximum aggregate purchase price (subject to
increase by the Company, the “2026 Notes Sub-Cap”) to be paid by
the Company for the 2026 Notes, excluding accrued interest, will be
limited to $50 million and the maximum aggregate purchase price
(subject to increase by the Company, the “2027 Notes Sub-Cap” and
together with the 2026 Notes Sub-Cap, the “Sub-Caps”) to be paid by
the Company for the 2027 Notes, excluding accrued interest, will
also be limited to $50 million.
The Tender Offers will expire at 11:59 p.m., New York City time,
on October 1, 2018, unless extended or terminated by the Company
(the “expiration date”). No tenders submitted after the expiration
date will be valid. Subject to the terms and conditions of the
Tender Offers and Consent Solicitations, the consideration for each
$1,000 principal amount of Notes validly tendered and accepted for
purchase pursuant to the Tender Offers will be the applicable
tender offer consideration for such series of Notes set forth in
the above table (with respect to each series of Notes, the “Tender
Offer Consideration”). Holders of Notes that are validly tendered
prior to 5:00 p.m., New York City time, on September 17, 2018
(subject to extension, the “early tender time”) and accepted for
purchase pursuant to the applicable Tender Offer will receive the
applicable Tender Offer Consideration and the applicable early
tender premium for such series of Notes as set forth in the table
above (the “Early Tender Premium” and, together with the applicable
Tender Offer Consideration, the “Total Consideration”). Holders of
Notes tendering their Notes after the early tender time will
receive the applicable Tender Offer Consideration but will not be
eligible to receive the Early Tender Premium. All holders of Notes
validly tendered and accepted for purchase pursuant to the Tender
Offers will also receive accrued and unpaid interest on such Notes
from the last interest payment date with respect to those Notes to,
but not including, the settlement date.
Notes that have been tendered may be withdrawn from the
applicable Tender Offer prior to 5:00 p.m., New York City time, on
September 17, 2018 (subject to extension, the “withdrawal
deadline”). Holders of Notes tendered after the withdrawal deadline
cannot withdraw their Notes or revoke their consents under the
Consent Solicitation unless the Company is required to extend
withdrawal rights under applicable law. The Company reserves the
right, but is under no obligation, to increase the Maximum
Aggregate Purchase Price or the Sub-Caps at any time, subject to
applicable law. If the Company increases the Maximum Aggregate
Purchase Price or the Sub-Caps, it does not expect to extend the
applicable withdrawal deadline, subject to applicable law.
Subject to the Maximum Aggregate Purchase Price, the Sub-Caps
and proration, the Company will purchase any Notes that have been
validly tendered and accepted in the applicable Tender Offer prior
to the expiration date promptly following the expiration date. The
settlement date is expected to occur on the second business day
following the expiration date.
If an aggregate principal amount of Notes validly tendered prior
to the early tender time is such that the aggregate purchase price
for such Notes equals or exceeds the Maximum Aggregate Purchase
Price, excluding accrued interest, the Company will not accept for
purchase any Notes tendered after the applicable early tender time
and will, subject to the applicable Sub-Caps, accept for purchase
only the Notes tendered before the early tender time pursuant to
the Acceptance Priority Levels. Acceptance for tenders of Notes of
a series may be subject to proration if the aggregate principal
amount of such series of Notes validly tendered would result in an
aggregate purchase price that exceeds the Maximum Aggregate
Purchase Price or the applicable Sub-Cap.
As part of the Tender Offers, prior to the early tender time,
the Company is also soliciting consents (the “Consent
Solicitations”) from the holders of the Notes for certain proposed
amendments described in the Offer to Purchase that would, among
other things, remove certain covenants and events of default
contained in the indentures governing the Notes (the “Proposed
Amendments”). Adoption of the Proposed Amendments with respect to
each series of Notes requires the consent of the holders of at
least a majority of the outstanding principal amount of such series
of Notes (the “Requisite Consents”). Each holder tendering Notes
pursuant to the Tender Offers must also deliver a consent to the
Proposed Amendments pursuant to the related Consent Solicitation
and will be deemed to have delivered their consents by virtue of
such tender. Holders may not deliver consents without also
tendering their Notes prior to the expiration date. The Proposed
Amendments will not become operative until (i) Notes of the
relevant series satisfying the Requisite Consent for such series
have been validly tendered, and (ii) the Company consummates the
Tender Offer with respect to such series of Notes in accordance
with its terms and in a manner resulting in the purchase of all
Notes of such series validly tendered before the Early Tender Time,
if the aggregate purchase price, excluding Accrued Interest, of
Notes validly tendered before the Early Tender Time exceeds the
Maximum Aggregate Purchase Price, or before the Expiration Date. If
the Proposed Amendments become operative with respect to the Notes,
holders of the Notes that do not tender their Notes prior to the
expiration date, or at all, will be bound by the Proposed
Amendments, meaning that the Notes will no longer have the benefit
of the existing terms of certain covenants contained in the
applicable Indenture. In addition, such holders will not receive
either the Tender Offer Consideration or the Early Tender
Premium.
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
of the Company’s subsidiaries that own and operate 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 purpose of the Tender Offers is to retire debt. If the
Tender Offers are not consummated, or if the amount of Notes
accepted for purchase in the Tender Offers results in the payment
of less than the Maximum Aggregate Purchase Price, the Company may
use the remaining amount of proceeds from the Fayetteville Sale
originally dedicated to the Tender Offers to repay or retire other
outstanding debt. The purpose of the Consent Solicitations is to
obtain Requisite Consents to adopt the Proposed Amendments with
respect to the applicable indentures governing the notes.
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. Global Bondholder
Services Corporation 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.
None of the Company, the Dealer Managers and Solicitations
Agents, the Tender Agent and Information Agent, the trustees under
the indentures governing the Notes or any of their respective
affiliates is making any recommendation as to whether holders
should tender any Notes in response to the Tender Offers and
Consent Solicitations. Holders must make their own decision as to
whether to participate in the Tender Offers and Consent
Solicitations, and, if so, the principal amount of Notes as to
which action is to be taken.
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 Statement
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; 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/20180904005394/en/
Southwestern Energy CompanyRandall BarronVice President &
Treasurer(832) 796-4851randall_barron@swn.com
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