Tullow - comment

Tullow have secured a 5-year debt facility from Glencore, which will be pari-passu with the “sub-2025 Notes”, and subordinated to the Senior Secured Notes maturing in May 2026. Tullow will pay SOFR +10% on drawn amounts and the facility will be used for liability management of the Tullow sub notes which mature in March 2025. 

As part of the transaction, Tullow has entered into an oil marketing and off-take agreement with Glencore for Tullow’s crude oil entitlements from Jubilee and TEN in Ghana and Rabi Light in Gabon, which will run concurrently with the notes facility agreement. 

This facility is effectively an extension of the sub notes, which should allow Tullow to launch another bond tender of the sub bonds, subject to rating agency actions. We had hoped to re-examine the Tullow structure and opportunity set post their trading statement on Wednesday.