California Resources Prices $550M Senior Notes at 7.25% to Refinance Higher-Rate Debt
CRC sits 30% above its 52-week low of $43.245.
Summary
California Resources priced a $550 million private offering of senior unsecured notes at 7.25% due 2035, using the proceeds to redeem existing 8.250% notes due 2029, reducing interest costs and extending debt maturity.
Key Events · Financing and Capital Events · CRC
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Debt Refinancing Priced
California Resources priced a private offering of $550 million in 7.250% senior unsecured notes due 2035 at par. This finalizes the terms of the offering initiated earlier today.
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Reduced Interest Expense
The new notes carry a 7.250% interest rate, a 100 basis point reduction from the 8.250% rate of the notes being redeemed, resulting in $5.5 million in annual interest savings.
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Extended Debt Maturity
The new notes mature in 2035, extending the maturity of this debt by six years compared to the 2029 maturity of the notes being redeemed.
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Use of Proceeds
Net proceeds of approximately $541 million will be used, along with cash on hand or revolving credit borrowings, to redeem all outstanding $550 million of 8.250% senior notes due 2029 at a redemption price of 104.125%.
Analysis · CRC · Energy & Transportation
California Resources has finalized the pricing of its $550 million private offering of senior unsecured notes. This is a financially positive move as the company is replacing existing 8.250% notes due 2029 with new 7.250% notes due 2035. This refinancing reduces annual interest expense by $5.5 million and extends the maturity profile of a significant portion of its debt by six years, improving financial flexibility. While there is a redemption premium for the old notes, the long-term benefits of lower interest costs and extended maturity outweigh this short-term expense.
At the time of this filing, CRC was trading at $56.25 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $5B. The 52-week trading range was $43.25 to $71.98. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.