By Wendy Van Sickle
Columbus, Ohio, March 4 – ARC Resources Ltd. sold C$1 billion of senior notes (DBRS: BBB) in two tranches, according to a news release on Thursday.
The notes include C$450 million of 2.354% notes, series 1, due 2026 and C$550 million of 3.465% notes, series 2, due 2031.
RBC Capital Markets and CIBC Capital Markets are leading the offering, which is being made on a private placement basis to accredited investors in Canada under Regulation S.
ARC intends to use the net proceeds, together with drawings under its credit facilities, to redeem and/or purchase the outstanding senior notes of Seven Generations Energy Ltd. in connection with the completion of the combination of the two businesses. The balance, if any, will be used for general corporate purposes. The issuance of investment-grade debt is expected to reduce the overall cost of capital for the combined company, according to the release.
If the business combination has not closed by 5 p.m. ET on Oct. 15, 2021, the notes will be subject to a special mandatory redemption at par plus accrued interest.
ARC, a subsidiary of Calgary, Alta.-based ARC Energy Trust, is an oil and gas company. Seven Generations is a Calgary, Alta.-based energy exploration and production company.
| Issuer: | ARC Resources Ltd.
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| Issue: | Senior notes
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| Amount: | C$1 billion
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| Agents: | RBC Capital Markets and CIBC Capital Markets
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| Call: | Mandatory redemption at par plus interest if combination of company with Seven Generations Energy has not closed by Oct. 15, 2021
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| Pricing date: | March 4
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| Closing date: | March 10
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| Rating: | DBRS: BBB
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| Distribution: | Canada
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| Series 1
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| Amount: | C$450 million
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| Maturity: | 2026
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| Coupon: | 2.354%
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|
|
| Series 2
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| Amount: | C$550 million
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| Maturity: | 2031
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| Coupon: | 3.465%
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