KOSMOS ENERGY LTD. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Other Events, Financial Statements and Exhibits (form 8-K)

Published: 2021-10-26 16:35:11 ET KOS

Item 1.01 Entry into a Material Definitive Agreement

In connection with the previously announced private offering of $400 million aggregate principal amount of 7.750% senior notes due 2027 (the "Notes") to eligible purchasers, Kosmos Energy Ltd. (the "Company") issued such Notes under the indenture dated October 26, 2021 (the "Indenture") among the Company, the guarantors named therein (the "Guarantors"), Wilmington Trust, National Association, as trustee, paying agent, transfer agent and registrar, and Banque Internationale à Luxembourg S.A., as Luxembourg listing agent, Luxembourg paying agent and Luxembourg transfer agent.

The Notes mature on May 1, 2027. Interest accrues at 7.750% per annum from October 26, 2021 and is payable semi-annually in arrears each May 1 and November 1, commencing on May 1, 2022. The Notes are senior, unsecured obligations of the Company and rank equal in right of payment with all of its existing and future senior indebtedness (including all borrowings under the revolving credit facility (the "Corporate Revolver"), its 7.125% Senior Notes due 2026 (the "7.125% Notes") and its 7.500% Senior Notes due 2028 (the "7.500% Notes" and, together with the 7.125% Notes, the "Existing Notes") and rank effectively junior in right of payment to all of its existing and future secured indebtedness (including all borrowings under the commercial debt facility (the "Facility") and all borrowings under the secured term loan (the "GoM Term Loan").

The Notes are guaranteed on a senior, unsecured basis by certain subsidiaries owning the Company's U.S. Gulf of Mexico assets and on a subordinated, unsecured basis by certain of its subsidiaries that borrow under, or guarantee, the Facility and, on a subordinated basis, guarantee the Corporate Revolver and the Existing Notes. In addition, within ten business days following the completion of customary "know your customer" and related procedures performed by the lenders of the Corporate Revolver, the Company will use commercially reasonable efforts to cause each of Kosmos Energy Ghana Holdings Limited and Anadarko WCTP Company to guarantee the Notes on a senior, unsecured basis.

At any time prior to November 1, 2023, and subject to certain conditions, the Company may, on one or more occasions, redeem up to 40% of the original principal amount of the Notes with an amount not to exceed the net cash proceeds of certain equity offerings at a redemption price of 107.750% of the outstanding principal amount of the Notes, together with accrued and unpaid interest and premium, if any, to, but excluding, the date of redemption. Additionally, at any time prior to November 1, 2023 the Company may, on any one or more occasions, redeem all or a part of the Notes at a redemption price equal to 100%, plus any accrued and unpaid interest, and plus a "make-whole" premium.

On or after November 1, 2023, the Company may redeem all or a part of the Notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest:

Upon the occurrence of a "change of control triggering event" as defined under the Indenture, the Company will be required to make an offer to repurchase Notes at a repurchase price equal to 101% of the outstanding principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.

If the Company sells assets, under certain circumstances outlined in the Indenture, it will be required to use the net proceeds to make an offer to purchase Notes at an offer price in cash in an amount equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.

The Indenture restricts the ability of the Company and its restricted subsidiaries to, among other things: incur or guarantee additional indebtedness, create liens, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, enter into agreements that restrict the ability of the Company's subsidiaries to make dividends or other payments to the Company, enter into transactions with affiliates or effect certain consolidations, mergers or amalgamations. These covenants are subject to a number of important qualifications and exceptions. Certain of these covenants will be terminated if the Notes are assigned an investment grade rating by both Standard & Poor's Rating Services and Fitch Ratings Inc. and no default or event of default has occurred and is continuing.

The information set forth above in this Item 1.01 is qualified in its entirety by the terms of the Indenture and Notes. A copy of the Indenture (including the Form of Notes) is filed as Exhibit 4.1 hereto, and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

The information set forth in Item 1.01 of this Form 8-K is incorporated by reference to this Item 2.03.

On October 26, 2021, the Company utilized the net proceeds from the Notes described herein, together with cash on hand, to fund the repurchase in full of the Company's floating rate notes due 2022 (the "Private Placement Notes") and to discharge the indenture governing the Private Placement Notes. The Company previously issued $400 million of Private Placement Notes in a private placement to Barclays Bank PLC and Standard Chartered Bank and used the proceeds from the Private Placement Notes to fund, in part, the previously announced acquisition of Anadarko WCTP Company from a subsidiary of Occidental Petroleum Corporation.