Sable Offshore Corp. announced plans to raise up to $400 million through concurrent public offerings of common stock and convertible senior notes as the offshore energy company moves to refinance existing debt and strengthen its balance sheet.
The company intends to offer $100 million of common stock alongside $300 million in convertible senior notes due 2031. Underwriters will have 30-day options to purchase up to an additional $15 million of common stock and $45 million in notes to cover over-allotments.
The proceeds from the offerings, together with funding from a previously announced new senior secured term loan, will be used primarily to repay Sable's existing senior secured term loan with Exxon Mobil Corp., as well as cover transaction costs and support general corporate purposes.
The three financing transactions are cross-conditioned, meaning each will close only if all are successfully completed.
The convertible notes will be senior unsecured obligations maturing July 1, 2031, unless earlier redeemed, repurchased or converted. Interest will be paid semiannually, while key terms—including the interest rate and conversion price—will be determined when the offering is priced.
Sable will have the option to redeem the notes beginning in July 2029, subject to certain conditions, including its share price exceeding 175% of the conversion price for a specified period. Noteholders will also have customary rights to require repurchase following certain fundamental corporate events or on July 6, 2029.
J.P. Morgan is serving as sole book-running manager for both the common stock and convertible notes offerings, while U.S. Bank Trust Company, N.A. is expected to serve as trustee for the notes.