Item 1.01 - Entry into a Material Definitive Agreement.
Indenture and Notes
On November 9, 2021, Continental Resources, Inc. (the "Company") and its
subsidiaries, Banner Pipeline Company, L.L.C. ("Banner"), CLR Asset Holdings,
LLC ("CLR Asset Holdings") and The Mineral Resources Company ("TMRC", and
together with Banner and CLR Asset Holdings, the "Initial Guarantors") entered
into a Purchase Agreement (the "Purchase Agreement") with Citigroup Global
Markets, Inc., BofA Securities, Inc., RBC Capital Markets, LLC and TD Securities
(USA) LLC, as the representatives of the several initial purchasers
(collectively, the "Initial Purchasers"), relating to the issuance and sale of
$800 million in aggregate principal amount of the Company's 2.268% senior notes
due 2026 (the "2026 Notes") and $800 million in aggregate principal amount of
the Company's 2.875% senior notes due 2032 (the "2032 Notes", and together with
the 2026 Notes, the "Notes"). The Notes were offered and sold in a transaction
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"). The Notes were resold by the Initial Purchasers
in reliance on Rule 144A and Regulation S of the Securities Act.
The Notes were issued pursuant to an indenture, dated November 22, 2021 (the
"Indenture"), among the Company, the Initial Guarantors and Wilmington Trust,
National Association, as trustee (the "Trustee"). Capitalized terms used in this
section "Indenture and Notes" in this Form 8-K, but not otherwise defined have
the meanings assigned to them under the Indenture.
The Notes are general unsecured senior obligations of the Company. The Notes
rank equally in right of payment with all of the Company's existing and future
Senior Indebtedness and senior in right of payment to any of the Company's
future Subordinated Indebtedness. The Notes will effectively be junior in right
of payment to all of the Company's future secured Indebtedness and other
obligations, to the extent of the value of the assets securing such Indebtedness
and other obligations. The Notes are fully and unconditionally guaranteed on a
senior basis by the Initial Guarantors, which are three of the Company's six
subsidiaries and by certain future subsidiaries, if any, of the Company. The
Notes will be structurally subordinated to all obligations of each of the
Company's existing and future subsidiaries, if any, that do not guarantee the
Notes.
Interest and Maturity
The 2026 Notes will mature on November 15, 2026, and interest is payable on the
2026 Notes on May 15 and November 15 of each year, commencing May 15, 2022. The
2032 Notes will mature on April 1, 2032, and interest is payable on the 2032
Notes on April 1 and October 1 of each year, commencing April 1, 2022.
Optional Redemption
2026 Notes
The Company has the option to redeem the 2026 Notes, in whole or in part, at any
time prior to November 15, 2023 at the applicable Make-Whole Redemption Price,
plus accrued and unpaid interest, if any, to, but excluding, the redemption
date. In addition, any time on or after November 15, 2023, the Company may
redeem the 2026 Notes, in whole or in part, at a redemption price equal to 100%
of the principal amount of the 2026 Notes being redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date.
2032 Notes
The Company also has the option to redeem the 2032 Notes, in whole or in part,
at any time prior to January 1, 2032 at the applicable Make-Whole Redemption
Price, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date. In addition, any time on or after January 1, 2032, the Company
may redeem the 2032 Notes, in whole or in part, at a redemption price equal to
100% of the principal amount of the 2032 Notes being redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Certain Covenants
The Indenture contains certain covenants that, among other things, restrict:
• the Company's ability and the ability of its Restricted Subsidiaries and
future Restricted Subsidiaries, if any, to:
• create, incur or assume any Funded Debt secured by any Liens (other
than Permitted Liens) upon any of the properties of the Company or any
Restricted Subsidiary or upon any Capital Stock of any Restricted
Subsidiary or any Capital Stock of any Subsidiary that owns, directly
or indirectly through ownership in another Subsidiary, the Capital
Stock of any Restricted Subsidiary (provided the Company and any
Subsidiary may create, incur or assume Funded Debt secured by Liens up
to an aggregate amount equal to 15% of the Company's Adjusted
Consolidated Net Tangible Assets); and
• enter into any Sale/Leaseback Transaction; and
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• the Company's ability to consolidate or merge with or into, or sell,
convey, lease or otherwise dispose of all or substantially all of its
assets to, another Person; and
• each Guarantor's ability to consolidate or merge with or into another
Person.
These covenants are subject to a number of important exceptions and
qualifications.
Events of Default
The Indenture provides that each of the following is an Event of Default with
respect to each series of the Notes: (i) default by the Company or any Guarantor
in the payment of principal of or any premium on such Notes when due and payable
at Maturity; (ii) default by the Company or any Guarantor in the payment of
interest on such Notes when due and the continuation of such default for 30
days; (iii) default on any other Indebtedness of the Company or any Guarantor if
either (a) such default results in the acceleration of the maturity of any such
Indebtedness having a principal amount of $25.0 million or more individually or,
taken together with the principal amount of any other such Indebtedness the
maturity of which has been so accelerated, in the aggregate, or (b) such default
results from the failure to pay when due principal of any such Indebtedness,
after giving effect to any applicable grace period, having a principal amount of
$25.0 million or more individually or, taken together with the principal amount
of any other Indebtedness under which there has been a Payment Default, in the
aggregate; (iv) failure by the Company to comply with certain covenants relating
to merger, consolidation or sale of assets or to make or consummate a Net
Proceeds Offer or a Change of Control Offer; (v) failure by the Company or any
Guarantor to remedy for 60 days after notice any breach or default in the
performance of the other covenants or agreements in the Indenture provided the
Company has 90 days to remedy or receive a waiver if the Company is attempting
to remedy such breach or default as promptly as reasonably practicable; (vi) any
Guarantee ceases to be in full force and effect, other than in accordance with
the terms of the Indenture, or a Guarantor of such Notes denies or disaffirms
its obligations under its Guarantee; and (vii) certain events of bankruptcy or
insolvency described in the Indenture with respect to the Company or any
Guarantor. In the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company, all outstanding Notes of
such series will become due and payable immediately without further action or
notice. If any other Event of Default occurs and is continuing, the Trustee or
the holders of at least 25% in principal amount of the then outstanding Notes of
such series may declare the Notes to be due and payable immediately.
A copy of the Indenture is filed as Exhibit 4.1 to this Current Report on
Form 8-K ("Form 8-K") and is incorporated herein by reference. The description
of the Indenture in this report is a summary and is qualified in its entirety by
the terms of the Indenture.
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Form 8-K is incorporated herein by
reference.
Item 9.01 - Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
4.1 Indenture dated as of November 22, 2021, among Continental
Resources, Inc., Banner Pipeline Company, L.L.C., CLR Asset Holdings,
LLC, The Mineral Resources Company and Wilmington Trust, National
Association, as trustee.
104 Cover Page Interactive Data File (embedded within the XBRL document)
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