NEW YORK - BP (NYSE:BP) Capital Markets p.l.c., a wholly-owned subsidiary of oil and gas giant BP p.l.c. (NYSE: BP) (LSE: BP), has initiated a cash tender offer to repurchase up to $1 billion of its outstanding perpetual subordinated notes. The notes, which have a total outstanding principal amount of $2.5 billion and carry a 4.375% interest rate, are being targeted for buyback under specific terms and conditions outlined in the offer to purchase dated today.
The tender offer, which is set to expire on March 25, 2024, includes an early tender time by 5:00 p.m. New York City time on March 8, 2024. Noteholders who validly tender their securities by this early deadline are eligible to receive the total consideration of $990 per $1,000 principal amount, which includes an early tender payment plus accrued interest. Tenders submitted after the early deadline but before the expiration will receive the total consideration minus the early tender payment.
According to the terms, the offer is subject to an offer cap and may be increased or decreased at the discretion of the offeror, subject to applicable laws. If the offer cap is reached by the early tender time, the company may not accept additional notes unless the cap is raised. Notes accepted for purchase will be retired and cancelled, and the buyback is contingent upon the completion of a public offering of new debt securities that closes no later than the expiration time.
MUFG Securities Americas Inc. and TD Securities (USA) LLC are acting as the lead dealer managers for the tender offer. D.F. King & Co., Inc. has been appointed as the tender and information agent.
This financial move follows BP's broader strategic financial management efforts and is based on a press release statement issued by the company.
InvestingPro Insights
BP p.l.c. (NYSE: BP) (LSE: BP), in its latest financial maneuver, has displayed a commitment to optimizing its capital structure through the repurchase of its subordinated notes. This action aligns with the company's management strategy, which, according to InvestingPro Tips, has been focused on aggressively buying back shares. This could signal management's confidence in the company's valuation and future prospects.
InvestingPro Data indicates that BP has a market capitalization of $98.84 billion, and it operates with a moderate level of debt. The company's Price/Earnings (P/E) ratio stands at 6.72, which was adjusted to 5.23 over the last twelve months as of Q4 2023, suggesting a potentially undervalued stock in comparison to earnings. The dividend yield as of the latest data is 4.88%, which is particularly notable given that BP has maintained dividend payments for 33 consecutive years, underscoring its commitment to shareholder returns even amidst the volatile energy market.
Investors may find additional value in the fact that BP is trading near its 52-week low, as per InvestingPro Tips, which could represent a buying opportunity for those who believe in the company's fundamentals and long-term strategy in the Oil, Gas & Consumable Fuels industry. For investors considering taking action on BP's securities, it's worth noting that there are 8 additional tips available on InvestingPro to aid in making a more informed decision. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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