Simpson Thacher Represents Initial Purchasers and Lenders in $5 Billion Notes Financing and $3 Billion Credit Facility Financing for California Resources Corporation in Connection with its Spin-off from Occidental Petroleum Corporation
The Firm represented the initial purchasers, led by Merrill Lynch, Pierce, Fenner & Smith Incorporated, in the sale by California Resources Corporation (“CRC”) of $1.0 billion 5% Senior Notes due 2020, $1.75 billion 5½% Senior Notes due 2021 and $2.25 billion 6% Senior Notes due 2024. The Firm is also representing J.P. Morgan Securities LLC, other lead arrangers, JPMorgan Chase Bank, N.A. and other lenders in connection with a new $1.0 billion senior term loan facility and a new $2.0 billion revolving credit facility for CRC. The notes and the two credit facilities will initially be guaranteed on a senior unsecured basis by all of CRC’s material subsidiaries.
CRC expects to use the proceeds from the notes offering, the term loan facility and a portion of borrowings under the revolving credit facility to make a cash distribution to Occidental Petroleum Corporation in connection with Occidental’s announced spin-off of CRC. Following the spin-off, which is expected to be completed in the fourth quarter of 2014, CRC will be an independent, publicly traded oil and natural gas exploration and production company focused exclusively on California, where it is the largest producer on a gross operated basis and has established a mineral acreage position consisting of approximately 2.3 million net acres spanning the state’s four major oil and gas basins.
The Simpson Thacher team included Art Robinson, Lesley Peng, Lia Toback, Xavier Kowalski and Chinh Vo (Capital Markets); Robert Rabalais, Brian Minyard, Roald Nashi and Matthew Farrell (Credit); David Teigman and Joo Hyun Lee (Executive Compensation and Employee Benefits); Jonathan Cantor, Andrew Purcell and Noah Metz (Tax); Jodie Sopher Pimentel (Intellectual Property); Tim Mulvihill (Environmental); Linda Daugherty and Stanley Mitchell (Oil and Gas); and Jennie Getsin (Blue Sky and FINRA).