ConocoPhillips prices tender offer, lifts cap to $1.8 billion

By Marisa Wong

Morgantown, W.Va., June 7 – ConocoPhillips announced pricing terms for its tender offer to purchase up to $1.8 billion of notes from eight series. Pricing was set at 2 p.m. ET on June 7.

Earlier on Thursday, ConocoPhillips said investors had tendered $4.51 billion principal amount of notes as of the early deadline at 5 p.m. ET on June 6.

The company also increased the tender cap to $1.8 billion from $1.75 billion, according to an earlier update.

The cash tender offer began on May 23 and is set to continue until 11:59 p.m. ET on June 20. Because the offer has been oversubscribed as of the early deadline, however, the company said it does not expect to accept for purchase any notes tendered after the early deadline.

The early tenders and tender offer considerations are as follows, with the notes listed in order of priority of acceptance:

• $670,742,000 of the $1 billion 2.4% senior notes due 2022, all of the which were accepted for purchase with $329,258,000 outstanding after the offer. The total tender offer consideration is $972.38 per $1,000 principal amount, set using a spread of 30 basis points over the 2.75% Treasury due April 30, 2023;

• $574,362,000 of the $1 billion 3.35% senior notes due 2024, all of which were accepted for purchase with $425,638,000 remaining after the offer. The total tender offer consideration is $1,002.23 per $1,000 principal amount, set using a spread of 55 bps over the 2.75% Treasury due April 30, 2023;

• $300,767,000 of the $500 million 3.35% senior notes due 2025, all of the which were accepted for purchase with $199,233,000 remaining after the offer. The total tender offer consideration is $1,005.07 per $1,000 principal amount, set using a spread of 35 bps over the 2.875% Treasury due May 15, 2028;

• $341,991,000 of the $500 million 4.15% senior notes due 2034, of which $254,129,000 were accepted for purchase using a proration factor of 74.3% with $245,871,000 remaining after the offer. The total tender offer consideration is $1,039.69 per $1,000 principal amount, set using a spread of 75 bps over the 3% Treasury due Feb. 15, 2048;

• $565.81 million of the $750 million 4.3% senior notes due 2044, none of which were accepted for purchase. The purchase price would have been based on a spread of 85 bps over the 3% Treasury due Feb. 15, 2048;

• $799,587,000 of the $1.25 billion 4.95% senior notes due 2026, none of which were accepted for purchase. The purchase price would have been based on a spread of 65 bps over the 2.875% Treasury due May 15, 2028;

• $304.55 million of the $1,549,114,000 6.95% senior notes due 2029, none of which were accepted for purchase. The purchase price would have been based on a spread of 115 bps over the 2.875% Treasury due May 15, 2028; and

• $950,876,000 of the $2.75 billion 6.5% senior notes due 2039, none of which were accepted for purchase. The purchase price would have been based on a spread of 115 bps over the 3% Treasury due Feb. 15, 2048.

All the notes will be purchased by subsidiary ConocoPhillips Co. except the 6.5% notes due 2039, which will be purchased by ConocoPhillips. All were issued by ConocoPhillips Co. except for the 6.95% senior notes due 2029, which were issued by Conoco Inc., and the 6.5% notes due 2039, which were issued by ConocoPhillips.

All the purchase prices include an early tender premium of $30.00 per $1,000 principal amount, which will be paid to holders who tendered by the early tender deadline.

ConocoPhillips will also pay accrued interest up to but excluding the settlement date, which was expected to be June 11 for early tenders.

Notes tendered before the early deadline have priority of acceptance over those tendered after, regardless of the priority level.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Credit Agricole Securities (USA) LLC (866 807-6030 or 212 261-7802), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) and TD Securities (USA) LLC (855 495-9846 or 212 827-7199) are lead dealer managers. Barclays, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc., SMBC Nikko Securities America, Inc. and Wells Fargo Securities, LLC are co-dealer managers.

Global Bondholder Services Corp. (212 430-3774, 866 924-2200 or contact@gbsc-usa.com) is tender agent and information agent.

ConocoPhillips is a Houston-based exploration and production company.

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