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Apache Corp. (APA), the second-largest U.S. independent oil and natural gas producer by market value, sold $3 billion in debt to help finance its $2.85 billion acquisition of Cordillera Energy Partners III LLC.
Apache issued $400 million of 1.75 percent five-year notes, $1.1 billion of 3.25 percent 10-year debt and $1.5 billion of 4.75 percent 31-year bonds, according to data compiled by Bloomberg. Proceeds from the sale will be used to fund part of Apache’s purchase of Denver-based Cordillera, according to a person familiar with the offering who declined to be identified citing lack of authorization to speak publicly about the sale.
The energy company will also use proceeds from the offering to repay its 6.25 percent senior unsecured notes due this month. The Houston-based firm has $400 million of notes maturing April 15, Bloomberg data show. Anadarko Petroleum Corp. (APC) is the largest U.S. independent oil and gas producer by market value.
The five-year notes priced to yield 70 basis points more than similar-maturity Treasuries; the 10-year portion had a spread of 100 basis points; and the 31-year piece had a 135- basis-point spread.
The new bonds have been rated A3 by Moody’s Investors Service and A- by Standard & Poor’s, the ratings companies said in separate reports today. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. helped manage the sale.
Apache said in January it would buy Cordillera with $2.25 billion of cash and $600 million in stock. The oil and gas driller has $7.2 billion of debt outstanding, according to a Feb. 29 regulatory filing.
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