| ITEM 1.01 | Entry into a Material Definitive Agreement |
Private Placement
On September 1, 2020, Range Resources Corporation (the “Company”) completed a private offering of $300 million aggregate principal amount of 9.25% Senior Notes due 2026 (the “New Notes”). The New Notes rank equally with, and are treated under the Indenture (as defined below) as a single class of debt securities with, the $550,000,000 aggregate principal amount of the 9.250% senior notes due 2026 previously issued by the Company on January 24, 2020 (the “Initial Notes” and, together with the New Notes, the “Notes”). The Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s existing subsidiaries (collectively, the “Subsidiary Guarantors”).
The New Notes were offered by the Initial Purchasers (as defined below) pursuant to Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold in the United States absent registration or an applicable exemption from the registration requirements. The New Notes were issued at par, and the Company intends to use the net proceeds from this offering, together with borrowing from its bank credit facility, to purchase for cash in the previously announced tender offers (the “Tender Offers”) $500 million in aggregate principal amount of its 5.750% senior notes due 2021, 5.750% senior subordinated notes due 2021, 5.875% senior notes due 2022, 5.000% senior notes due 2022, 5.000% senior subordinated notes due 2022 and 5.000% senior notes due 2023 (collectively, the “Target Notes”), including fees and expenses incurred in connection therewith.
Indenture
The New Notes were issued pursuant to an indenture, dated as of January 24, 2020 (the “Indenture”), by and among the Company, the Subsidiary Guarantors, and U.S. Bank National Association, as trustee (the “Trustee”). The Notes will mature on February 1, 2026. Interest on the New Notes will accrue from August 1, 2020 and will be payable on each February 1 and August 1. The Company may redeem some or all of the Notes at any time and from time to time on or after February 1, 2022 at the redemption prices specified in the Indenture. The Company may also redeem up to 35% of the Notes at a redemption price equal to 109.25% of the principal amount thereof, plus accrued and unpaid interest, if any, using all or a portion of the net proceeds of public sales of certain equity interests completed before February 1, 2022. The Company may also redeem the Notes prior to February 1, 2022 upon payment of the make-whole premium specified in the Indenture. Upon the occurrence of certain changes in control followed by a rating decline, the Company may be required to offer to repurchase the Notes. The Indenture contains restrictive covenants that will limit the Company’s and its subsidiaries’ ability to incur debt, grant liens securing debt and pay dividends and other customary covenants, all as more fully set forth in the Indenture. The Notes and the guarantees are general unsecured obligations of the Company and the Subsidiary Guarantors and rank pari passu in right of payment with all senior unsecured indebtedness of the Company and the Subsidiary Guarantors. The Notes rank effectively junior to any secured indebtedness of the Company and the Subsidiary Guarantors, including under the Company’s bank credit facility, and other secured obligations to the extent of the value of the assets constituting collateral securing such indebtedness and obligations. The Notes rank senior in right of payment to any existing or future subordinated indebtedness, and are structurally subordinated to any indebtedness and other obligations of any subsidiaries of the Company that in the future do not guarantee the Notes. A copy of the Indenture was filed as Exhibit 4.1 to the Current Report on Form 8-K filed with Securities Exchange Commission (the “SEC”) on January 24, 2020 and is incorporated herein by reference.
Registration Rights Agreement
In connection with the private placement of the New Notes, the Company, the Subsidiary Guarantors and J.P. Morgan Securities LLC, as representative of the several initial purchasers named therein (the “Initial Purchasers”), entered into a Registration Rights Agreement dated September 1, 2020 (the “Registration Rights Agreement”), whereby the Company and the Subsidiary Guarantors have agreed, at their expense, to use commercially reasonable efforts to (i) cause to be filed a registration statement enabling the holders to exchange the privately placed New Notes and guarantees for registered notes and guarantees with substantially similar terms (except that the exchange notes shall not contain terms with respect to transfer restrictions or liquidated damages upon a Registration Default, as defined in the Registration Rights Agreement), (ii) cause the registration statement to become effective, (iii) complete the exchange offer within 60 days after such effective date but not later than January 23, 2021 and (iv) file a shelf registration statement for the resale of the New Notes if the exchange offer cannot be effected within the time periods listed above. The interest rate on the New Notes will increase if the Company does not comply with its obligations under the Registration Rights Agreement. A copy of the Registration Rights Agreement is filed herewith as Exhibit 4.2 to this report and incorporated by reference herein.
| ITEM 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement |
The information provided under Item 1.01 in this Current Report on Form 8-K regarding the New Notes, the Indenture, the Registration Rights Agreement and the related guarantees is incorporated by reference into this Item 2.03. The descriptions set forth in Item 1.01 and this Item 2.03 are qualified in their entirety by the full text of the Indenture and the Registration Rights Agreement.
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