California Resources prices $400 million in senior notes at 7%

LONG BEACH - California Resources Corporation (NYSE:CRC), currently trading at $56.12 and maintaining a market capitalization of $4.7 billion, announced Wednesday the pricing of a $400 million private offering of 7.000% senior unsecured notes due 2034 at par.

The notes will be guaranteed by all of CRC’s existing subsidiaries that guarantee its revolving credit facility and other senior unsecured notes. With a moderate debt level of $1.09 billion and a healthy debt-to-equity ratio of 0.32, the company maintains strong financial flexibility. The offering is expected to close on October 8, 2025, subject to customary closing conditions. According to InvestingPro’s analysis, CRC maintains a "GREAT" financial health score of 3.31, suggesting robust operational stability.

CRC estimates net proceeds of approximately $394 million after deducting initial purchasers’ discount and expenses. The company plans to use these proceeds, along with cash on hand and borrowings under its revolving credit facility, to repay Berry Corporation’s (bry) existing debt in connection with their pending business combination.

The notes include a special mandatory redemption provision if the merger with Berry does not occur by March 14, 2026 (subject to possible extensions), or if CRC notifies the trustee that the merger agreement has been terminated or is unlikely to be completed.

The securities will be offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act, as they have not been registered under the Securities Act or applicable state securities laws.

In connection with the merger, CRC will file a registration statement with the SEC that will include a proxy statement/prospectus for Berry shareholders.

The announcement was made in a press release statement from the company. Trading near its 52-week high of $60.41, InvestingPro’s Fair Value analysis suggests CRC is currently slightly undervalued, making it an interesting watch for investors seeking detailed financial insights. Get access to CRC’s comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks, for in-depth analysis and actionable investment intelligence.

In other recent news, California Resources Corporation has announced plans to offer $400 million in senior unsecured notes due 2034. The proceeds from this offering will be used to repay Berry Corporation’s existing debt as part of their pending business combination. Analysts have reacted positively to this development, with UBS raising its price target for California Resources to $70, maintaining a Buy rating, and highlighting the company’s commitment to its operations in California. Similarly, Mizuho increased its price target to $71, citing the all-stock acquisition of Berry Corporation for approximately $717 million and the potential for $85 million in annualized synergies.

Additionally, UBS reiterated a Buy rating on California Resources, noting the passage of California’s SB-237 as a favorable development for the company’s upstream operations. Texas Capital Securities also maintained a Buy rating on Berry Petroleum, pointing to the draft legislation as beneficial for both Berry and California Resources. These recent developments reflect a period of strategic activity and positive analyst sentiment for California Resources Corporation.

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