Chevron issues $4.75 billion in various notes due 2027-2035

Chevron Corporation (NYSE:CVX), one of the world’s leading integrated energy companies with a market capitalization of $273.2 billion, has announced the issuance of a series of notes totaling $4.75 billion through its indirect wholly owned subsidiary, Chevron U.S.A. Inc. ("CUSA"). According to InvestingPro data, the company maintains a strong financial health score and operates with a moderate debt level, making this issuance well within its capacity. The notes, which were issued on Tuesday, include both fixed and floating rate securities with varying maturities from 2027 to 2035.

The offering comprises $750 million of 4.405% notes due in 2027, another $750 million of floating rate notes due the same year, $1 billion of 4.475% notes due in 2028, and $500 million of floating rate notes also maturing in 2028. Additionally, Chevron has issued $1.1 billion of 4.687% notes due in 2030, $650 million of 4.819% notes due in 2032, and $750 million of 4.980% notes due in 2035.

Interest payments for the fixed rate notes will begin on August 26, 2025, and for the floating rate notes on May 27, 2025. The floating rate notes will have an interest rate based on the Compounded Secured Overnight Financing Rate (SOFR) plus a specified margin.

Chevron has guaranteed the notes unconditionally and unsecured, indicating that they will rank equally with other unsecured and unsubordinated indebtedness. The company has the option to redeem the fixed rate notes at any time before maturity at a price detailed in the final prospectus supplement.

The notes were issued under an indenture dated August 12, 2020, as supplemented by a third supplemental indenture dated Tuesday. Barclays (LON:BARC) Capital Inc., BofA Securities, Inc., and J.P. Morgan Securities LLC acted as representatives for the underwriters in the transaction.

The issuance is part of Chevron’s broader financial strategy and follows an underwriting agreement dated Monday. The company and CUSA filed the relevant prospectus and final prospectus supplement with the Securities and Exchange Commission (SEC) as part of the process.

The proceeds from the note issuance are expected to be used for general corporate purposes, which may include refinancing existing debt, funding capital expenditures, and other business opportunities. With a debt-to-equity ratio of just 0.17 and robust cash flows sufficient to cover interest payments, the company maintains significant financial flexibility. InvestingPro analysis reveals that Chevron’s overall financial health is rated as GOOD, supported by strong profitability metrics and consistent dividend payments maintained for 55 consecutive years.

This financial move comes as Chevron continues to navigate the dynamic energy market, balancing investment in traditional and renewable energy sources. The notes offering is based on a press release statement and reflects the company’s efforts to secure long-term financing under favorable terms. Trading near its 52-week high but still showing potential upside according to InvestingPro’s Fair Value analysis, Chevron demonstrates strong market positioning with an EBITDA of $40.1 billion in the last twelve months. For deeper insights into Chevron’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Chevron Corporation has announced a significant restructuring of its leadership team and organizational structure, aiming to enhance operational efficiency. The company will consolidate its Oil, Products & Gas organization into two segments: Upstream and Downstream, Midstream & Chemicals. Mark Nelson will serve as vice chairman and executive vice president, while Clay Neff and Bruce Niemeyer will take on roles as presidents of Upstream and Shale & Tight, respectively. Chevron also confirmed plans to lay off 15% to 20% of its workforce, translating to approximately 6,000 to 8,000 positions, as part of a broader cost-cutting initiative. This move is intended to improve cash generation and is not indicative of broader issues within the company. Additionally, Chevron’s oil and gas reserves have dropped to their lowest levels in over a decade, highlighting the importance of its planned $53 billion acquisition of Hess Corporation (NYSE:HES). This acquisition faces legal hurdles due to a dispute with Exxon Mobil (NYSE:XOM) over rights to Guyana oilfields. Meanwhile, Chevron has been increasing shareholder returns through dividends and share buybacks, having repurchased $30 billion worth of shares in the past two years.

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