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WPX launches $500M senior note offering to fund tender offers

WPX Energy Inc. commenced an offering of $500 million of its senior unsecured notes due 2027 to fund its concurrently started cash tender offers, according to a Sept. 10 news release.

The Oklahoma-based oil and gas producer would use the offer's proceeds, along with other funds including borrowings under its revolving credit facility, to fund cash tender offers for up to $450 million of its outstanding 6.000% senior notes due 2022 and its 8.250% senior notes due 2023. The company would use any excess proceeds for general corporate purposes, including the repayment or redemption of outstanding debt.

Holders of notes validly tendered by 5 p.m. ET on Sept. 23 would receive a tender offer consideration of $1,067.50 per $1,000 principal for the 2022 notes and $1,140 for the 2023 notes, according to a separate same-day news release. Both offers include an early tender premium of $50.

A successful offering "will help shift most of [WPX's] 2022 maturities to 2027 as well as up to $150 million in more expensive 2023 notes," Suntrust Robinson Humphrey analyst Neal Dingmann said in a Sept. 10 note. The removal of the 2022 maturities is the most significant part of the deal since investors are looking at debts due over the next three years, Dingmann said.

WPX's tender offers are scheduled to expire Oct. 7, unless extended or earlier terminated by the company.

BofA Merrill Lynch is the dealer manager for the tender offers. Bank of America Merrill Lynch, J.P. Morgan, and MUFG are lead book-runners for the senior note offering.