Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On October 1, 2019, Marathon Oil Corporation (the “Company”) closed a remarketing to investors of sub-series A bonds (the “Sub-Series A Bonds”), which are part of the $1 billion St. John the Baptist, State of Louisiana Revenue Refunding Bonds (Marathon Oil Corporation Project) Series 2017 (the “2017 Bonds”) issued and purchased by the Company on December 18, 2017. The Sub-Series A Bonds will be subject to mandatory tender and conversion, purchase, redemption and/or remarketing on the Mandatory Purchase Dates noted below. The Sub-series A Bonds are not subject to optional redemption. The Sub-Series A Bonds were priced on September 12, 2019 and will accrue interest at the interest rates set forth below.
Sub-Series A Bonds Par Amount Interest Rate Mandatory Purchase Date Maturity Date
Sub-series A-1 Bonds: $200 million 2.00% April 1, 2023 June 1, 2037
Sub-series A-2 Bonds: $200 million 2.10% July 1, 2024 June 1, 2037
Sub-series A-3 Bonds: $200 million 2.20% July 1, 2026 June 1, 2037
The Company will continue to own the remaining $400 million of the 2017 Bonds and has the right to redeem, tender, convert and/or remarket them to investors at any time up to the 2037 maturity date.
The Company may elect to convert the rate periods on all or part of the 2017 Bonds by providing notice of such conversion pursuant to the documents governing the 2017 Bonds not fewer than 35 days before the proposed conversion. Any 2017 Bonds subject to conversion will be subject to mandatory tender, purchase and/or remarketing.
The 2017 Bonds shall be subject to special mandatory redemption prior to maturity on a date selected by the Company not later than 180 days after the occurrence of a determination of taxability (pursuant to the documents governing the 2017 Bonds) at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date. The 2017 Bonds are also subject to extraordinary optional redemption, in whole or in part, at a redemption price of 100% of the principal amount thereof, plus accrued interest to the redemption date on any date within one year after, as a result of any changes in the Constitution of Louisiana or the Constitution of the United States of America or of legislation or
administrative action (whether local, state or federal) or by final decree, judgment or order of any court or administrative body (whether local, state or federal) that the Refunding Agreement related to the 2017 Bonds (which in part obligates the Company to make loan repayments which will be used to make debt service on the 2017 Bonds) shall have become void or unenforceable or impossible to perform in accordance with the intent and purposes of the parties, or shall have been declared to be unlawful.
The 2017 Bonds are subject to acceleration in the case of certain events of default, including but not limited to payment defaults, covenant defaults, certain events of dissolution, liquidation, insolvency, bankruptcy or reorganization involving the Company.