Baytex Energy Corp. has announced that it plans to offer US$750 million aggregate principal amount of senior unsecured notes due 2030 in a private offering. The Notes will pay interest semi-annually in arrears, and the final terms will be determined at the time of pricing. The gross proceeds of the offering will be held in escrow until certain conditions are met, including the consummation of a previously announced merger with Ranger Oil Corporation.
Once the escrow release conditions are satisfied, Baytex plans to use the net proceeds from the offering, along with borrowings under its credit facilities, to fund the cash portion of the consideration for the merger, repay certain outstanding debts of both companies, and pay fees and expenses related to the merger. The merger is expected to close in the second quarter of 2023, subject to customary closing conditions, and the closing of the merger is not dependent on the completion of the offering.
However, if the escrow release conditions are not met by October 15, 2023, or if certain other events occur, such as the termination of the merger agreement, the Notes will be subject to a special mandatory redemption at a price equal to 100% of the initial offering price, plus accrued and unpaid interest from the issue date of the notes to, but not including, the payment date of such mandatory redemption.
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