Item 1.01. Entry into a Material Definitive Agreement.
On July 14, 2022 (the “Effective Date”), Hess Corporation (the “Company”) and one of its indirect wholly-owned subsidiaries entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement provides for commitments by the lenders thereunder in the form of committed revolving loans and by issuing banks thereunder in the form of letters of credit (in an aggregate amount not to exceed $2 billion, of which $800 million is committed as of the Effective Date), in an aggregate amount of up to $3.25 billion (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at the applicable interest rates based on the Secured Overnight Financing Rate, or SOFR, plus the applicable margins specified in the Credit Agreement, which generally vary based on the credit rating of the Company’s senior, unsecured, non-credit enhanced long-term debt. The Revolving Credit Facility includes an accordion feature, pursuant to which the aggregate commitments may be increased by up to an additional $1 billion under certain circumstances. The Credit Agreement expires on July 14, 2027, unless earlier terminated or extended in accordance with its terms.
The Credit Agreement replaces the Company’s existing credit agreement dated as of April 18, 2019, as amended as of April 13, 2021, among the Company, the subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “2019 Credit Agreement”), which was terminated on the Effective Date. The Company did not pay any prepayment penalties in connection with the termination of the 2019 Credit Agreement.
The Credit Agreement contains customary representations, warranties and covenants, including a financial covenant limiting the ratio of Total Consolidated Debt to Total Capitalization (as such terms are defined in the Credit Agreement) of the Company and its consolidated subsidiaries to 0.650 to 1.000, and customary events of default.
One of the Company’s indirect wholly-owned subsidiaries, Hess Overseas Finance Investments Centre Limited, and such additional subsidiaries as may be added as borrowing subsidiaries as provided in the Credit Agreement may borrow and request letters of credit up to the full amount of the commitment, with all such extensions of credit being guaranteed by the Company.
Many of the lenders under the Credit Agreement have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending and/or commercial banking services or other services for the Company or its affiliates, and affiliates or certain of these lenders have served in the past as underwriters in public offerings of securities by the Company, for which they have received, and may in the future receive, customary compensation and expense reimbursement.
The foregoing description is qualified in its entirety by reference to the complete text of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The description of the 2019 Credit Agreement in this Current Report on Form 8-K is qualified in its entirety by reference to the description of the 2019 Credit Agreement in the Company’s Current Report on Form 8-K filed on April 13, 2021, and the complete text of the 2019 Credit Agreement, filed as Annex I to Exhibit 10.1 thereto, which are incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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