Devon Energy Corp (NYSE:DVN) announced on Wednesday the closing of a public offering of senior notes valued at $2.25 billion. The offering comprises two sets of notes: $1.25 billion of 5.200% Senior Notes due 2034 and $1 billion of 5.750% Senior Notes due 2054.
The notes are unsecured and rank equally with Devon's existing and future unsecured and unsubordinated debt. Interest on both sets of notes is to be paid semi-annually, with the first payment scheduled for March 15, 2025. The 2034 Notes will mature on September 15, 2034, and the 2054 Notes on September 15, 2054.
Devon Energy has the option to redeem the notes before their respective par call dates at a "make-whole" redemption price. After the par call dates, the redemption price will be 100% of the principal amount. Furthermore, a special mandatory redemption clause is included, which requires Devon to redeem the notes at 101% of the principal amount plus accrued interest if the pending acquisition of the Williston Basin business from Grayson Mill Energy is not completed by a specified date or if the purchase agreement is terminated prior to that date.
The notes were issued under an indenture agreement with U.S. Bank Trust Company, National Association, serving as the trustee. This financial move is part of Devon's broader strategy to fund its pending acquisition and refinance existing debt.
The offering was made under a shelf registration statement filed on March 3, 2023, and is detailed in a prospectus supplement dated August 19, 2024. This report is based on the company's filing with the Securities and Exchange Commission and does not constitute an offer to sell or a solicitation of an offer to buy the notes.
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