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Chord Energy Corp (NASDAQ:CHRD), a $6.32 billion market cap energy company, has successfully issued $750 million in senior unsecured notes, carrying an interest rate of 6.750% and maturing on March 15, 2033. The announcement was made following the completion of the offering on Thursday, March 13, 2025. These notes are accompanied by guarantees from certain subsidiaries of the company. According to InvestingPro data, the company maintains a moderate debt level with strong cash flows to cover interest payments.
The proceeds from the notes have been allocated to repurchase $366.342 million of the company’s 6.375% senior unsecured notes due in 2026 through a cash tender offer. The remaining funds will be used to redeem any outstanding 2026 notes not acquired in the tender offer, repay part of the company’s senior secured revolving credit facility, and cover related fees and expenses. InvestingPro analysis shows the company maintains excellent financial health with an overall score of 3.25 out of 4, suggesting strong management of its financial obligations.
Chord Energy has the option to redeem up to 40% of the new notes before March 15, 2028, using proceeds from certain equity offerings at a price of 106.750% of the principal amount. Additionally, the company may redeem the notes at any time before this date at 100% of the principal amount plus a make-whole premium. From March 15, 2028, the notes can be redeemed at decreasing prices until they reach par in 2030.
The new notes rank equally with all other senior debt and above any future subordinated debt but are subordinated to any secured debt up to the value of the collateral.
The indenture governing the notes imposes restrictions on the company and certain subsidiaries, limiting their ability to invest, incur additional debt, create liens, sell assets, and engage in certain other transactions. These covenants will cease if the notes achieve investment-grade ratings from two of the three rating agencies and no defaults are ongoing.
On Friday, March 14, 2025, Chord Energy also fulfilled its obligations under the indenture for its 2026 notes, depositing sufficient funds with the trustee to finance the redemption of the remaining notes, effectively discharging the indenture.
This financial restructuring is based on a press release statement and aims to improve the company’s debt profile and financial flexibility. With an EBITDA of $2.3 billion in the last twelve months, Chord Energy demonstrates robust operational performance. InvestingPro analysis indicates the stock is currently trading below its Fair Value, presenting a potential opportunity for investors. For detailed insights and additional ProTips about Chord Energy’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Chord Energy Corporation reported its fourth-quarter 2024 earnings, significantly surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $3.49, exceeding the forecasted $2.96, while revenue reached $1.45 billion, surpassing the anticipated $1.12 billion. In addition to these results, Chord Energy announced a 4% increase in its base dividend. On the financial front, the company returned $944 million to shareholders over the year and repurchased over 5% of its shares, demonstrating strong financial health with a low net leverage of 0.3x at year-end.
Additionally, Chord Energy has set plans to issue $750 million in senior unsecured notes with a 6.750% interest rate, due in 2033, to finance a cash tender offer for its outstanding 6.375% notes due in 2026 and repay part of its borrowings. Truist Securities maintained a Buy rating on Chord Energy, with a $186 price target, highlighting the company’s robust financial position and potential involvement in mergers and acquisitions. Chord Energy’s strategic focus on shareholder returns and operational efficiencies continues to position it favorably in the market. These developments underscore the company’s ongoing commitment to capital discipline and shareholder value.
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