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BHP - subordinated note repurchase plan
BHP announced the results of its global multi-currency subordinated note repurchase plan.
BHP Billiton Finance (USA) Ltd. (“BHPB Finance (USA) Ltd.”) and BHP Billiton Finance Ltd. (“BHPB Finance Ltd.” and, together with BHPB Finance (USA) Ltd., the “Companies” and each a “Company”) today announced the results of BHP’s global multi-currency subordinated note repurchase plan, announced on 13 November 2020, which includes:
(a) an invitation by BHPB Finance (USA) Ltd. to eligible holders of its outstanding USD2,250,000,000 6.750 per cent. Subordinated Non-Call 10 Fixed Rate Reset Notes due 2075 guaranteed by BHP Group Ltd. and BHP Group Plc (the “Parent Companies”) (ISIN: US055451AX66 (Rule 144A) / USQ12441AB91 (Reg S)) (CUSIP: 055451AX6 / Q12441AB9), of which USD745,768,000 in principal amount of such Notes was outstanding as at the Launch Date (the “US Dollar Notes”); and
(b) an invitation by BHPB Finance Ltd. to eligible holders of its outstanding EUR750,000,000 5.625 per cent. Subordinated Non-Call 9 Fixed Rate Reset Notes due 2079 guaranteed by BHP Group Ltd. and such Notes and such guarantee being guaranteed by BHP Group Plc (ISIN: XS1309436910), of which EUR714,733,000 in principal amount of such Notes was outstanding as at the Launch Date (the “Euro Notes”; the Euro Notes and the US Dollar Notes each being a “Series”, and any notes within any such Series being the “Notes”, and the eligible holders of any Notes, the “Holders”),
to offer to tender any and all of their Notes for repurchase by the relevant Company for cash (together, the “Offers”), on the terms and conditions set out in a tender offer memorandum dated 13 November 2020 prepared by the Companies in connection with the Offers (the “Tender Offer Memorandum”).
Results of Offers
The Expiration Deadline for the Offers was 5:00 p.m., New York City time, on 23 November 2020 (the “Expiration Deadline”). The Withdrawal Deadline was 5:00 p.m., New York City time, on 23 November 2020. As a result, tendered Notes may no longer be withdrawn.
Holders who tendered their Notes pursuant to the Guaranteed Delivery Procedures set out in the Tender Offer Memorandum must deliver such Notes no later than 5:00 p.m. (New York City time) on the second Business Day after the Expiration Deadline, being 25 November 2020 (such applicable date and time, the “Guaranteed Delivery Deadline”).
Payment for the Notes validly tendered and accepted for purchase (and, in the case of Notes tendered pursuant to the Guaranteed Delivery Procedures, validly delivered by the Guaranteed Delivery Deadline) will be made on the Settlement Date, expected to be 27 November 2020, the third Business Day after the Expiration Deadline.
The Companies have an option to redeem remaining Notes of a Series at par plus any accrued but unpaid interest following the purchase of at least 80 per cent. of the aggregate principal amount of Notes of such Series issued on the “Issue Date” for such Series
As detailed further in the Tender Offer Memorandum, the terms and conditions of each Series allow the relevant Company (subject to applicable laws) to redeem the Notes in that Series early (in whole but not in part), at their outstanding principal amount plus any accrued but unpaid interest, if a “Substantial Repurchase Event” occurs, meaning at least 80 per cent. of the aggregate principal amount of the Notes of such Series issued on the “Issue Date” for such Series has been purchased by or on behalf of the relevant Company and certain related parties of the relevant issuing Company.
Following settlement:
(a) 88.75 per cent. of the total aggregate principal amount of the US Dollar Notes issued on the “Issue Date” for such Series will have been purchased by BHPB Finance (USA) Ltd. assuming that all US Dollar Notes tendered pursuant to the Guaranteed Delivery Procedures are validly delivered by the Guaranteed Delivery Deadline or 88.69 per cent. of the total aggregate principal amount of the US Dollar Notes issued on the "Issue Date" excluding any US Dollar Notes tendered pursuant to the Guaranteed Delivery Procedures; and
(b) 66.18 per cent. of the total aggregate principal amount of the Euro Notes issued on the “Issue Date” for such Series will have been purchased by BHPB Finance Ltd.
Accordingly, at such time, a “Substantial Repurchase Event” will have been triggered in respect of the US Dollar Notes and it is the current intention of BHPB Finance (USA) Ltd. to redeem the remaining US Dollar Notes at their outstanding principal amount plus any accrued but unpaid interest, in accordance with the US Dollar Notes’ terms and conditions, following settlement of the Offer for US Dollar Notes. However, BHPB Finance (USA) Ltd. is not under any obligation to make any such redemption and BHPB Finance (USA) Ltd.’s intention to do so may change at any time and for any reason.
BHPB Finance Ltd. may choose to acquire outstanding Euro Notes by way of open market purchases from time to time, but is under no obligation to make any such open market purchases. In addition, if such open market purchases are made and a “Substantial Repurchase Event” is triggered in respect of the Euro Notes, BHPB Finance Ltd. is not under any obligation to make any redemption pursuant to the terms and conditions of the Euro Notes.
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BHP - subordinated note repurchase
BHP announced that, following the successful tender offers consummated in September 2020 in respect of certain US dollar and euro subordinated notes issued in 2015, the Board has approved a further global multi-currency subordinated repurchase plan, targeting any and all US dollar and euro subordinated notes remaining in such series of subordinated notes issued in 2015. The multi-currency plan aims to further reduce the group’s gross debt balance, reduce associated interest costs and enhance the group’s capital structure by allocating surplus cash towards payment of the Notes pursuant to the Offers.
In addition, to further the aims described above and as detailed below and in the Tender Offer Memorandum, it is the current intention of each Company, following the Offers, to redeem the remaining Notes of each Series at their outstanding principal amount plus any accrued but unpaid interest, in accordance with the Series’ terms and conditions, if a “Substantial Repurchase Event” is triggered in respect of such Series by the purchase of any Notes pursuant to the relevant Offer(s). Such “Substantial Repurchase Event” shall occur when at least 80 per cent. of the aggregate principal amount of the Notes of such Series issued on the “Issue Date” for such Series has been purchased by or on behalf of the relevant Company and certain related parties of the relevant issuing Company. In this context, the Offers therefore provide Holders with an opportunity to sell their Notes at a level substantially above the par consideration that would be received by Holders in the event that a “Substantial Repurchase Event” were to be triggered and the relevant Company were to redeem the Notes of the relevant Series.
No assurance can be given that the 80 per cent. threshold described above will or will not be met in respect of any Series of Notes; however, the Companies note that, following the successful tender offers consummated by the Companies in September 2020, the “Substantial Repurchase Event” shall be triggered in respect of the US Dollar Notes with the purchase of a further USD295,768,000 in aggregate principal amount of the US Dollar Notes (which is equivalent to 39.7 per cent. of the outstanding principal amount of such US Dollar Notes) and in respect of the Euro Notes with the purchase of a further EUR564,733,000 in aggregate principal amount of the Euro Notes (which is equivalent to 79.0 per cent of the outstanding principal amount of such Euro Notes) (in each case, considering the principal amount of Notes outstanding on the Launch Date).
Overview of Offers
BHP Billiton Finance (USA) Ltd. (“BHPB Finance (USA) Ltd.”) and BHP Billiton Finance Ltd. (“BHPB Finance Ltd.” and, together with BHPB Finance (USA) Ltd., the “Companies” and each a “Company”) today announced:
(a) an invitation by BHPB Finance (USA) Ltd. to eligible holders of its outstanding USD2,250,000,000 6.750 per cent. Subordinated Non-Call 10 Fixed Rate Reset Notes due 2075 guaranteed by BHP Group Ltd. and BHP Group Plc (the “Parent Companies”) (ISIN: US055451AX66 (Rule 144A) / USQ12441AB91 (Reg S)) (CUSIP: 055451AX6 / Q12441AB9), of which USD745,768,000 in principal amount of such Notes is outstanding as at the Launch Date (the “US Dollar Notes”); and
(b) an invitation by BHPB Finance Ltd. to the eligible holders of its outstanding EUR750,000,000 5.625 per cent. Subordinated Non-Call 9 Fixed Rate Reset Notes due 2079 guaranteed by BHP Group Ltd. and such Notes and such guarantee being guaranteed by BHP Group Plc (ISIN: XS1309436910), of which EUR714,733,000 in principal amount of such Notes is outstanding as at the Launch Date (the “Euro Notes”; the Euro Notes and the US Dollar Notes each being a “Series”, and any notes within any such Series being the “Notes”, and the eligible holders of any Notes, the “Holders”),
to offer to tender any and all of their Notes for repurchase by the relevant Company for cash (together, the “Offers”), on the terms and conditions set out in a tender offer memorandum dated 13 November 2020 prepared by the Companies in connection with the Offers (the “Tender Offer Memorandum”).
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BHP - Shenzi transaction completed
BHP announced that it has completed the transaction to acquire an additional 28 per cent working interest in Shenzi from Hess Corporation (Hess), for USD505 million subject to the typical adjustment to reflect net cash generated from the 1 July 2020 transaction effective date to the close date of 6 November 2020.
The transaction brings BHP’s working interest to 72% and adds approximately 11 000 barrels of oil equivalent per day of production (90% oil) as of the transaction closing date of 6 November 2020.
Total petroleum production guidance for the 2021 financial year of between 95 and 102 MMboe will be updated at the second quarter Operational Review (released 20 January 2021 AEST) to reflect the additional production from Shenzi and other operational updates such as Gulf of Mexico hurricane impacts.
Shenzi is a six-lease development in the deepwater Gulf of Mexico and is structured as a joint ownership: BHP (Operator, 72% interest) and Repsol S.A. (28% interest).
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