Exxon is calling in $626.5m of XTO Energy notes a decade or more before they mature, and every one of them was issued before Exxon owned the company
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Six hundred and twenty-six million dollars. That is the principal being retired on 27 September, across three series of notes carrying coupons of 6.10, 6.375 and 6.75 percent.
The issuer is not Exxon. It is XTO Energy Inc., a Delaware corporation and now a wholly owned subsidiary of ExxonMobil Holdings Corporation, and all three of the indentures behind the notes were signed before Exxon bought the company. The oldest is dated 13 April 2005. The newest supplemental indenture is dated 18 April 2008.
The three series
The 6.10 percent notes due 2036 have $174,435,000 outstanding. The 6.75 percent notes due 2037 have $252,384,000. The 6.375 percent notes due 2038 have $199,725,000. Weighted by principal, the three average 6.45 percent.
All are being called in full, on the same day, under section 10.8 of their respective base indentures. The price in each notice is identical: 100 percent of principal, plus the Make-Whole Amount as defined in that series' supplemental indenture, plus accrued and unpaid interest to the redemption date.
The filing does not say what the make-whole comes to. It is not a fixed premium. It is a formula in a document the notice points at rather than reproduces, and a holder who wants the number has to go and find the indenture.
What the notices do and do not do
Interest stops accruing on 27 September unless the issuer defaults. Book-entry notes are surrendered through The Depository Trust Company and paid the same way, which will be almost all of them. Certificated holders are told to send the paper to BNY Corporate Trust at 500 Ross Street in Pittsburgh, by post, by courier or by hand.
The 8-K is careful about its own status. It says in terms that it does not constitute a redemption notice and that it is qualified in its entirety by the three exhibits.
Nothing in the filing says why. There is no stated reason, no funding source, and no mention of what else the subsidiary owes. The document was accepted at 11.26 in the morning, and signed by James R. Chapman, the company's vice president for corporate finance and treasurer.
