CALGARY, Alberta – Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) today announced that it has commenced a consent solicitation (the “Consent Solicitation”) with respect to a proposed amendment to the pledge agreement (the “2037 Notes Pledge Agreement”) in respect of Cenovus’s outstanding 6.80% Notes due 2037 (the “2037 Notes”). The 2037 Notes were issued under an indenture, dated as of September 11, 2007 (as supplemented and amended, the “Indenture”) between Cenovus (as successor by amalgamation to Husky Energy Inc. (“Husky”)) and Wells Fargo Bank, National Association (as successor trustee to The Bank of Nova Scotia Trust Company of New York) (the “Trustee”). The Indenture also governs the outstanding 4.40% Notes due 2029 (the “2029 Notes”), 4.00% Notes due 2024 (the “2024 Notes”) and 3.95% Notes due 2022 (the “2022 Notes”) of Cenovus (in each case, originally issued by Husky).
The Consent Solicitation will expire at 5 p.m., New York City time, on April 20, 2021 (as such date may be extended or terminated early by Cenovus in its sole discretion) (the “Expiration Time”). Cenovus, in its sole discretion, may terminate the Consent Solicitation, without the obligation to make any cash payments, at any time prior to the Effective Time (as defined below), whether or not the Requisite Consents (as defined below) have been received. Except for the Proposed Amendment, all of the existing terms of the 2037 Notes, the Indenture and the 2037 Notes Pledge Agreement will remain unchanged.
Subject to the terms and conditions described in the Solicitation Materials (as defined below), Cenovus is soliciting consents from the holders of the 2037 Notes as of the Record Date (as defined in Cenovus’s Consent Solicitation Statement, dated April 12, 2021) (“Holders”) to conform the 2037 Notes Pledge Agreement to the pledge agreements in respect of the 2029 Notes and the 2024 Notes (the “Proposed Amendment”).
Cenovus is offering to pay Holders who validly deliver and do not validly revoke their consent to the Proposed Amendment, in the manner described in the Solicitation Materials on or prior to the Expiration Time, the cash payment equal to the amount set forth below per $1,000 principal amount of the 2037 Notes held by such Holders, subject to the satisfaction or waiver of certain conditions, including the receipt of valid consents of a majority in aggregate principal amount of the 2037 Notes (the “Requisite Consents”). The 2037 Notes are currently rated Baa3 with a negative outlook and BBB- with a stable outlook by Moody’s and S&P Global Ratings, respectively. Cenovus does not expect that the Proposed Amendment will affect these ratings.
|Outstanding Aggregate Principal Amount||Consent
|$386,773,000||$1.00 per $1,000 principal amount of the 2037 Notes|
No Consents are being solicited from holders of the 2029 Notes, the 2024 Notes or the 2022 Notes, and the Proposed Amendment will not have an effect on any of these series of notes.
Cenovus anticipates that, promptly after receipt of the Requisite Consents at or prior to the Expiration Time, it will give notice to the Trustee that the Requisite Consents have been obtained and Cenovus, Husky Oil Limited Partnership and Husky Oil Operations Limited will execute an amendment to the 2037 Notes Pledge Agreement to give effect to the Proposed Amendment (such time, the “Effective Time”). The Proposed Amendment will become operative at the Effective Time and Holders will not be able to revoke their Consents after the Effective Time. Holders should note that the Effective Time may be prior to the Expiration Time and Holders will not be given prior notice of such Effective Time.
This news release does not set forth all of the terms and conditions of the Consent Solicitation. Holders of the 2037 Notes should carefully read Cenovus’s Consent Solicitation Statement, dated April 12, 2021, and any accompanying materials (collectively, the “Solicitation Materials”), for a complete description of all terms and conditions before making any decision with respect to the Consent Solicitation. None of Cenovus, the Trustee, the solicitation agent or the information and tabulation agent makes any recommendation as to whether Holders should deliver Consents to the Proposed Amendment. Additional information concerning the terms and conditions of the Consent Solicitation, and the procedure for delivering consents, may be obtained from the solicitation agent, J.P. Morgan Securities LLC, at (866) 834-4666 (toll-free) or (212) 834-3424 (collect). Copies of the Solicitation Materials may be obtained from the information and tabulation agent, Ipreo LLC, by calling (888) 593-9546 (toll-free) for banks and brokers or by email at ipreo-consentSolicitation@ihsmarkit.com.
This announcement is for information purposes only and is neither an offer to sell nor a solicitation of an offer to buy any 2037 Notes or any other securities. This announcement is also not a solicitation of consents with respect to the Proposed Amendment or any securities. The solicitation of consents by Cenovus is being made only pursuant to the Solicitation Materials. The Consent Solicitation is not being made in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable state or foreign securities or “blue sky” laws.
References in this news release to “dollars” or “$” are to United States dollars.