Cobalt to begin public offering of convertible senior notes

Cobalt International Energy Inc.

Cobalt International Energy Inc. (NYSE:CIE) plans to offer $1,000,000,000 aggregate principal amount of its convertible senior notes due 2024. Cobalt also intends to grant the underwriters of this offering the right to purchase, for a period beginning on the date that Cobalt will announce the pricing of this offering and ending on the date that is 12 days after the original issue date, up to an additional $150,000,000 aggregate principal amount of the notes on the same terms and conditions to solely cover over-allotments, if any.

The notes will be Cobalt’s senior unsecured obligations and interest will be payable semi-annually in arrears on May 15 and Nov. 15 of each year, beginning on Nov. 15. The notes will mature on May 15, 2024, unless earlier repurchased, redeemed or converted in accordance with their terms. The interest rate, conversion rate, conversion price, and other terms of the notes will be determined by Cobalt and the underwriters.

The notes will be convertible at the holder’s option, under certain circumstances and during certain periods, into cash, shares of Cobalt’s common stock or a combination of cash and shares of Cobalt’s common stock, at Cobalt’s election. In addition, following certain corporate events that occur prior to the maturity date, in certain circumstances, Cobalt will increase the conversion rate for a holder who elects to convert its Notes.

Cobalt may not redeem the notes prior to May 15, 2019. On or after May 15, 2019, Cobalt may redeem for cash all or any portion of the notes, at its option, but only if the last reported sale price of Cobalt’s common stock for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on, and including, the second trading day immediately preceding the date on which Cobalt provides notice of redemption, exceeds $30 (subject to customary adjustments) on each applicable trading day. The redemption price will equal 100% of the principal amount of the notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Cobalt intends to use the net proceeds from the sale of the notes to fund its capital expenditures and for general corporate purposes.

Goldman, Sachs & Co., and RBC Capital Markets LLC are acting as joint book-running managers for the offering.



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