LONDON: Tullow Oil plc has commenced an offering of senior secured notes due 2026 and has received $600 million of commitments in respect of a super senior revolving facilities agreement maturing in December 2024, comprised of (i) a $500 million revolving credit facility and (ii) a $100 million letter of credit facility.
The Notes and the Revolving Credit Facility will be senior secured obligations of the Company and will be guaranteed by certain of the Company’s subsidiaries.
Use of Proceeds
The Company intends to enter into the Transactions and use the proceeds from the offering of Notes, together with cash on hand, to extend the maturity profile of its indebtedness. These transactions are expected to be net leverage neutral by:
(i) repaying all amounts outstanding under, and cancelling all commitments made available pursuant to, the Company’s existing Reserves Based Lending Facility,
(ii) redeeming in full the Company’s $650 million aggregate principal amount of 6¼% Senior Notes due 2022 at a redemption price of 100% of their principal amount plus accrued and unpaid interest and additional amounts, if any, to the date of redemption,
(iii) at their maturity, repaying in full and cancelling the Company’s $300 million aggregate principal amount of 65/8% convertible bonds due 12 July 2021, and
(iv) paying fees and expenses incurred in connection with the Transactions.
Separately, the proceeds from these Transactions will not be used to pay any amounts under the $800 million of 7% Senior Notes due 2025.