Expand Energy Corporation Announces Tender Offer for 5.500% Senior Notes due 2026 and Redemption of 8.375% Senior Notes due 2028

Rhea-AI Summary

Expand Energy (NASDAQ: EXE) has announced two significant debt management initiatives: a cash tender offer for its 5.500% Senior Notes due 2026 and a conditional redemption of its 8.375% Senior Notes due 2028. The tender offer for the 2026 Notes (outstanding amount: $500 million) will expire on November 26, 2024, at 5:00 p.m. NYC time. The company plans to redeem all $304 million of its 2028 Notes on December 5, 2024, at 102.792% of the principal amount plus accrued interest, subject to securing sufficient financing.

Positive

• Proactive debt management through refinancing of high-interest 8.375% notes
• Strong financial position enabling tender offer for $500 million of 2026 notes

Negative

• Premium payment of 2.792% required for early redemption of 2028 notes
• Redemption contingent on securing new financing

Insights

Financial Analyst

This debt refinancing initiative demonstrates strategic financial management. The company is replacing $500 million of 5.500% notes and $304 million of 8.375% notes, potentially lowering its interest expenses significantly. The tender offer for the 2026 notes at Treasury + 30bps and redemption of the 2028 notes at 102.792% of face value suggests the company is taking advantage of current market conditions to optimize its capital structure.

The redemption premium on the 2028 notes and the tender mechanics for the 2026 notes indicate a well-structured liability management exercise. The conditional nature of the 2028 notes redemption, contingent on securing new financing, shows prudent risk management. This refinancing could improve the company's debt maturity profile and potentially reduce annual interest payments, strengthening its financial position.

OKLAHOMA CITY, Nov. 20, 2024 (GLOBE NEWSWIRE) -- Expand Energy Corporation (NASDAQ: EXE) (“Expand Energy”) announced today a cash tender offer (the “Tender Offer”) for any and all of its outstanding 5.500% Senior Notes due 2026 (the “2026 Notes”) and a conditional notice of redemption to redeem (the “Redemption”) all of its outstanding 8.375% Senior Notes due 2028 (the “2028 Notes”).

Tender Offer
Expand Energy has commenced the Tender Offer for any and all of the 2026 Notes. The Tender Offer is being made pursuant to an Offer to Purchase, dated November 20, 2024 (as may be amended or supplemented from time to time, the “Offer to Purchase”) and the related Notice of Guaranteed Delivery. Certain information regarding the 2026 Notes and the terms of the Tender Offer is summarized in the table below.

Title of Security	CUSIP Numbers / ISINs	Principal Amount Outstanding		U.S. Treasury Reference Security	Bloomberg Reference Page	Fixed Spread
5.500% Senior Notes due 2026	144A: 165167DF1 / US165167DF18 Reg S: U16450BA2 / USU16450BA27	$500,000,000		4.125% due January 31, 2025	FIT3	0 bps

The Tender Offer will expire at 5:00 p.m., New York City time, on November 26, 2024, unless extended or earlier terminated (such time and date, as the same may be extended, the “Expiration Time”). Tendered 2026 Notes may be withdrawn at any time before the earlier of (i) the Expiration Time and (ii) if the Tender Offer is extended, the 10th business day after the commencement of the Tender Offer. In addition, tendered 2026 Notes may be withdrawn at any time after the 60th business day after the commencement of the Tender Offer if for any reason the Tender Offer has not been consummated within 60 business days after commencement. Holders of 2026 Notes must validly tender and not validly withdraw their 2026 Notes (or comply with the procedures for guaranteed delivery) before the Expiration Time to be eligible to receive the consideration for their Notes.

The “Tender Offer Consideration” for each $1,000 principal amount of the 2026 Notes validly tendered, and not validly withdrawn, and accepted for purchase pursuant to the Tender Offer will be determined in the manner described in the Offer to Purchase by reference to the fixed spread for the 2026 Notes specified above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified above, as quoted on the Bloomberg Bond Trader FIT3 series of pages, at 2:00 p.m. New York City time, on November 26, 2024, the date on which the Tender Offer is currently scheduled to expire.

In addition to the Tender Offer Consideration, holders of 2026 Notes that are validly tendered and accepted for purchase will also receive accrued and unpaid interest to, but not including, the settlement date for the Tender Offer, which is currently expected to be December 3, 2024.

J.P. Morgan Securities LLC and TD Securities (USA) LLC are acting as dealer managers for the Tender Offer (the “Dealer Managers”). For questions regarding the Tender Offer, the Dealer Managers can be contacted as follows: J.P. Morgan Securities LLC, Liability Management Group, at (866) 834-4666 (toll-free) or (212) 834-4818 (collect) and TD Securities (USA) LLC at +1 (866) 584-2096 (toll-free), +1 (212) 827-2842 (collect), or LM@tdsecurities.com.

Copies of the Offer to Purchase and Notice of Guaranteed Delivery are available to holders of 2026 Notes from D.F. King & Co., Inc., the information agent and the tender agent for the Tender Offer. Requests for copies of the Offer to Purchase and Notice of Guaranteed Delivery should be directed to D.F. King & Co., Inc. toll-free at (800) 714-3310, email at exe@dfking.com or at www.dfking.com/exe.

Redemption
Expand Energy today announced a conditional notice of redemption to redeem all $304 million aggregate principal amount of its 2028 Notes (CUSIP No. 845467AP4) on December 5, 2024 (the “Redemption Date”), subject to the completion of a financing transaction sufficient to fund the redemption price. On the Redemption Date, Expand Energy will pay to the registered holders of the 2028 Notes a redemption price equal to 102.792% of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the Redemption Date.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any securities.

The Offer to Purchase has not been filed with the U.S. Securities and Exchange Commission (the “SEC”), nor have any such documents been filed with or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary. The Tender Offer is being made solely on the terms and conditions set forth in the Offer to Purchase. Under no circumstances shall this press release constitute an offer to buy or a solicitation of an offer to sell the 2026 Notes or any other securities of Expand Energy or any of its affiliates. The Tender Offer is not being made to, nor will Expand Energy accept tenders of 2026 Notes from, holders in any jurisdiction in which the Tender Offer or the acceptance thereof would not be in compliance with the securities of blue sky laws of such jurisdiction. No recommendation is made as to whether holders should tender their 2026 Notes. Holders of 2026 Notes should carefully read the Offer to Purchase because it contains important information, including the various terms and conditions of the Tender Offer.

This press release does not constitute a notice of redemption of the 2028 Notes. Holders of 2028 Notes should refer to the notice of redemption delivered to the registered holders of the 2028 Notes by U.S. Bank Trust Company, National Association, the trustee with respect to the 2028 Notes.

About Expand Energy
Expand Energy Corporation (NASDAQ: EXE) is the largest independent natural gas producer in the United States, powered by dedicated and innovative employees focused on disrupting the industry’s traditional cost and market delivery model to responsibly develop assets in the nation’s most prolific natural gas basins. Expand Energy’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. Expand Energy is committed to expanding America’s energy reach to fuel a more affordable, reliable, lower carbon future.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, the Redemption and the Tender Offer, as well as statements reflecting expectations, intentions, assumptions or beliefs about future events and other statements that do not relate strictly to historical or current facts. Although Expand Energy’s management believes the expectations reflected in such forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond Expand Energy’s control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause Expand Energy’s actual results to be materially different than those expressed in such forward-looking statement include those risks and uncertainties detailed in Expand Energy’s Annual Report on Form 10-K for the year ended December 31, 2023, Expand Energy’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024 and any other documents that Expand Energy files with the SEC. For a discussion of these risks, uncertainties and assumptions, investors are urged to refer to Expand Energy’s documents filed with the SEC that are available through Expand Energy’s website at www.expandenergy.com or through EDGAR at www.sec.gov. We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the date of the release, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risk and factors that may affect our business.

 

INVESTOR CONTACT:	MEDIA CONTACT:
Chris Ayres (405) 935-8870 ir@expandenergy.com	Brooke Coe (405) 935-8878 media@expandenergy.com

FAQ

When will Expand Energy (EXE) tender offer for 2026 Notes expire?

The tender offer for Expand Energy's 2026 Notes will expire at 5:00 p.m., New York City time, on November 26, 2024, unless extended or terminated earlier.

What is the redemption premium for Expand Energy's (EXE) 2028 Notes?

Expand Energy will pay a redemption premium of 102.792% of the principal amount of the 2028 Notes, plus accrued and unpaid interest.

What is the total outstanding amount of Expand Energy's (EXE) 2026 Notes?

The total outstanding amount of Expand Energy's 5.500% Senior Notes due 2026 is $500,000,000.