| ITEM 1.01 | Entry into a Material Definitive Agreement |
Purchase Agreement
On January 5, 2021, Range Resources Corporation (“the Company”) entered into a Purchase Agreement (the “Purchase Agreement”), by and among the Company, Range Production Company, LLC, Range Resources—Appalachia, LLC, Range Resources—Louisiana, Inc., Range Resources—Midcontinent, LLC and Range Resources—Pine Mountain, Inc. (collectively, the “Subsidiary Guarantors”) and BofA Securities, Inc., as representative of the several initial purchasers named therein (collectively, the “Initial Purchasers”), by which the Company agreed to issue and sell, and the Initial Purchasers agreed to purchase, $600 million aggregate principal amount of its 8.25% senior notes due 2029 (the “Notes”) in accordance with exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), afforded by Rule 144A and Regulation S.
The Company completed the offering of the Notes on January 8, 2021 and received net proceeds of approximately $590.8 million after deducting the Initial Purchasers’ discounts and estimated expenses of the offering payable by the Company. The Company intends to use the net proceeds from the offering for general corporate purposes, including the repayment of borrowings under its bank credit facility.
Some of the Initial Purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. Such Initial Purchasers have received, or may in the future receive, customary fees and commissions for these transactions. In particular, certain of the Initial Purchasers or their affiliates are lenders under the Company’s bank credit facility and may receive a portion of the net proceeds from this offering used to repay such bank credit facility.
The Purchase Agreement contains customary representations and warranties of the parties, conditions to closing, indemnification rights and termination provisions. The Company has agreed with the Initial Purchasers not to offer or sell any debt securities issued or guaranteed by the Company having a term of more than one year other than the Notes for a period of 60 days after the date of the Purchase Agreement without the prior written consent of BofA Securities, Inc. A copy of the Purchase Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The description of the Purchase Agreement in this report is a summary and is qualified in its entirety by the terms of the Purchase Agreement.
Indenture
The terms of the Notes are governed by the Indenture, dated as of January 8, 2021 (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 January 15, 2029. Interest will accrue from January 8, 2021 and will be payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2021.
The Notes are unsecured, rank equally with all of the existing and future senior unsecured debt of the Company and the Subsidiary Guarantors and rank senior to all of the existing and future subordinated debt of the Company and the Subsidiary Guarantors. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Subsidiary Guarantors. The Notes will 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 Company may, at its option, redeem some or all of the Notes at any time on or after January 15, 2024 at the redemption prices specified in the Indenture. Prior to such time, the Company may, at its option, redeem up to 35% of the aggregate principal amount of the Notes at the redemption price specified in the Indenture. In addition, before January 15, 2024, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the aggregate principal amount of the Notes redeemed, plus the “applicable premium” and accrued and unpaid interest, if any, to, but not including, the redemption date.
Upon the occurrence of certain changes in control, the Company must offer to repurchase the Notes. The Indenture contains customary events of default (each an “Event of Default”). If an Event of Default occurs and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding Notes may declare the unpaid principal of, premium, if any, and accrued but unpaid interest on, all the Notes then outstanding to be due and payable. Upon such a declaration, such principal, premium, if any, and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of, premium, if any, and interest on, all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the Notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
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