Shell plc has announced the launch of an exchange offer for six series of bonds totaling $8.4bn. These securities, currently issued by Shell International Finance B.V. and BG Energy Capital plc, will be converted into new bonds issued by Shell Finance US Inc., a U.S. subsidiary of the group, as part of a private placement. The operation is exclusively reserved for qualified holders, according to the terms outlined in the offering memorandum dated November 3.
The new bonds will have the same interest rates, maturities, and payment terms as the existing bonds, with the exception of the issuer’s name and minor technical adjustments. This initiative aims to centralize Shell’s debt in the U.S., where a growing portion of its operations and bondholders are located.
A Targeted Operation for Six Issues with a Total Value of $8.4 Billion
The affected securities include a $2.75bn issue with a 6.375% coupon maturing in 2038 and another $1.5bn issue with a 3.875% coupon maturing in 2028. A $900mn bond issued by BG Energy Capital plc maturing in 2041 is also included. Each new issue will be unconditionally guaranteed by Shell plc.
Eligible holders will receive, for each $1,000, a new bond of the same amount if their participation occurs before November 17, the deadline to receive the early participation premium of $30. After this deadline, only $970 in new debt will be issued for each $1,000 of exchanged face value, in addition to a $1 cash payment.
An Offer Subject to Minimum Thresholds and Timing Conditions
The completion of the exchange for each series depends on meeting a minimum threshold of $500mn in new issues. No exchange will occur if this threshold is not met, unless Shell chooses to waive this condition. The offer will expire on December 3 at 5:00 p.m., New York City time, with settlements expected by December 8, provided all conditions are met.
No bonds will be exchanged if the amount is insufficient according to the minimum denomination requirements, set at $1,000 for Shell’s notes and $200,000 for BG Energy Capital’s. No accrued but unpaid interest on the old bonds will be paid, except for specific rounding adjustments, but the new bonds will accrue interest from the last coupon date of the tendered bonds.
A Strategic Realignment of Bond Financing
This operation is part of Shell’s broader strategy to consolidate its bond financing around its U.S. platform. It aligns with a trend seen among several major European groups seeking to bring their debt closer to their key operational markets. The success of the operation will largely depend on institutional holders’ interest in this restructuring.
