Exxon Mobil Corp (NYSE:XOM) has entered into an underwriting agreement for the sale of $171.97 million in floating rate notes due in 2074, according to a recent filing with the Securities and Exchange Commission. The transaction took place on Monday, with the petroleum refining giant partnering with underwriters including Morgan Stanley (NYSE:MS) & Co. LLC, UBS Securities LLC, RBC Capital Markets, LLC, and Deutsche Bank (ETR:DBKGn) Securities Inc.
The notes are being issued under an indenture dated March 20, 2014, with Deutsche Bank Trust Company Americas serving as trustee. This indenture was previously supplemented on June 26, 2020, and further terms were established through an officer’s certificate dated today.
These debt securities were offered under Exxon Mobil's existing Registration Statement on Form S-3, which was initially filed on March 10, 2023. Legal opinions related to the offering, provided by Davis Polk & Wardwell LLP and in-house counsel Timothy Kim, Esq., have been filed as part of the current report and are incorporated into the Registration Statement.
The issuance of these notes represents Exxon Mobil's latest financial maneuver, as the company continues to manage its capital structure and meet its long-term financing needs. The notes are expected to be listed on the New York Stock Exchange under a yet-to-be-announced ticker symbol.
Investors and market watchers may view this move as part of Exxon Mobil's broader strategy to leverage the debt capital markets for financial flexibility. The company's choice of a floating rate for the notes suggests a measure to mitigate interest rate risk over the long term.
This news is based on information contained in the SEC filing and does not include any marketing language or subjective assessment of Exxon Mobil's market position. The financial details of the notes and the transaction have been provided without bias or promotional intent.
In other recent news, ExxonMobil's earnings and revenue have been a focal point for investors. Piper Sandler maintained an Overweight rating on ExxonMobil, despite a minor dip in earnings per share (EPS) projections, now at $1.91. The firm's confidence in ExxonMobil was echoed by Scotiabank and Mizuho, who both held their Neutral ratings steady. Goldman Sachs (NYSE:GS) also reaffirmed its Neutral rating, despite the oil giant's better-than-expected Chemicals results.
ExxonMobil's third-quarter earnings are projected to range between $6.9 billion and $10.1 billion, translating to $1.56 to $2.28 per share. However, the company anticipates a decrease in third-quarter upstream earnings due to changes in oil prices. This expected decline was disclosed in a regulatory filing, signaling a potential impact on the company's financial performance.
In other developments, ExxonMobil, alongside other major energy firms, may need to borrow substantial amounts to sustain shareholder returns due to a recent decline in oil prices, as noted by RBC Capital Markets.
Moreover, ExxonMobil, along with other top U.S. energy exploration companies, has reportedly paid more than $42 billion to foreign governments, a figure that significantly exceeds their payments within the United States, as per disclosures under a new Securities and Exchange Commission regulation. These are recent developments that have shaped the company's financial landscape.
InvestingPro Insights
Exxon Mobil's recent issuance of floating rate notes aligns with its strong financial position and market standing. According to InvestingPro data, the company boasts a substantial market capitalization of $557.0 billion, underlining its status as a major player in the oil and gas industry. This financial strength is further reflected in Exxon's ability to maintain a moderate level of debt, as highlighted by one of the InvestingPro Tips.
The company's solid financial footing is also evident in its dividend policy. An InvestingPro Tip reveals that Exxon Mobil has raised its dividend for an impressive 41 consecutive years, demonstrating a long-term commitment to shareholder returns. This is particularly noteworthy given the cyclical nature of the energy sector.
Currently trading near its 52-week high with a price-to-earnings ratio of 15.05, Exxon Mobil appears to be in a strong market position. This valuation, combined with analysts' predictions of profitability for the current year, suggests investor confidence in the company's financial strategy, including its recent debt issuance.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips on Exxon Mobil, providing deeper insights into the company's financial health and market prospects.
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