ExxonMobil’s XTO Energy Redeems $626.5 Million of Senior Notes

XTO Energy is redeeming all outstanding debt in three senior-note series on September 27, 2026, retiring securities that were not due to mature until 2036, 2037 and 2038. The ExxonMobil subsidiary had $626.544 million of principal outstanding across the three series when it issued the redemption notices on August 28.

The notes consist of $174.435 million of 6.10% senior notes due 2036, $252.384 million of 6.75% senior notes due 2037 and $199.725 million of 6.375% senior notes due 2038. Each series is being redeemed in full rather than partially, so the September 27 action removes the remaining principal of all three issues from XTO’s debt stack.

ExxonMobil Holdings Corporation disclosed the planned redemption in an August 28 Form 8-K. The filing says all notes still outstanding on the redemption date will be repurchased for cash at 100% of principal plus the applicable make-whole amount and accrued and unpaid interest through September 27. The filing does not disclose the final aggregate cash payment because the make-whole component is not stated as a fixed dollar amount.

Three long-dated note series are being retired in full

The 6.10% notes were scheduled to mature on April 1, 2036, the 6.75% notes on August 1, 2037, and the 6.375% notes on June 15, 2038. XTO is therefore calling the securities roughly a decade or more before their contractual maturities.

The redemption notices identify separate indentures governing the three issues. The 2036 notes are governed by a 2005 base indenture and a 2006 supplemental indenture. The 2037 notes use a 2007 base indenture and first supplemental indenture, while the 2038 notes use the same 2007 base indenture with a second supplemental indenture. All three notices state that XTO elected to redeem the full outstanding amount under the applicable indenture provisions.

For holders, the practical result is that the bonds stop generating interest after the redemption date, assuming XTO makes the required payment. Book-entry notes are surrendered through the Depository Trust Company in the usual manner. The notices also name The Bank of New York Trust Company as paying agent for certificated notes.

The current principal balances are far below the amounts that remained outstanding before an earlier XTO debt repurchase in 2010. At that time, the same three series had $591 million, $1.399 billion and $704 million of principal outstanding, respectively. XTO purchased about $2.048 billion across the three issues in that tender, according to an ExxonMobil release from July 2010. The residual balances have continued to sit in ExxonMobil’s consolidated debt disclosures in the years since.

Make-whole terms mean the cash cost exceeds principal alone

The $626.544 million principal total is not the same as the amount XTO must pay to complete the redemption. Each notice sets the price at 100% of principal plus a make-whole amount and accrued and unpaid interest to the redemption date. The make-whole feature is designed under the bond documents to account for the value of calling the debt before maturity, so the actual cash outlay will be higher than the principal amount unless the applicable calculation produces no additional amount.

That distinction is important when assessing the financial effect of the redemption. Retiring the notes eliminates future contractual coupon payments on the redeemed debt, but the make-whole provision requires an upfront payment tied to the early call. The filing does not quantify that premium, identify a funding source or state that the redemption is part of a refinancing. It also does not provide a stated rationale for choosing September 27 beyond the formal redemption notices.

ExxonMobil’s 2025 annual report still listed all three XTO series in long-term debt. Their year-end carrying values were $186 million for the 2036 notes, $282 million for the 2037 notes and $219 million for the 2038 notes. Those accounting amounts are not the same as the principal balances in the August 2026 notices, in part because ExxonMobil’s debt table includes carrying-value adjustments such as premiums. The more recent redemption notices provide the relevant principal amounts for the notes now being called.

Because all three securities carry coupons above 6%, they stand out against several lower-coupon ExxonMobil notes listed elsewhere in the company’s debt schedule. That comparison does not establish why XTO elected to redeem them, and ExxonMobil has not attributed the decision to interest-rate savings in the filing. The confirmed result is narrower: these specific long-dated XTO obligations are being extinguished before their stated maturities on the terms set out in their indentures.

The notes are legacy XTO debt from before ExxonMobil’s ownership

XTO became part of ExxonMobil in June 2010. Exxon Mobil Corporation completed its acquisition after a wholly owned ExxonMobil subsidiary merged into XTO, leaving XTO as the surviving corporation and a wholly owned subsidiary. ExxonMobil’s filing on the acquisition said each outstanding XTO common share was converted into the right to receive 0.7098 ExxonMobil shares, with cash paid instead of fractional shares.

The three bonds being redeemed predate that acquisition. The 2036 issue traces to a 2006 supplemental indenture, and the 2037 and 2038 series trace to supplemental indentures dated in 2007 and 2008. Their continued appearance on ExxonMobil’s consolidated balance sheet reflects obligations that XTO carried into the ExxonMobil group rather than debt issued as part of the 2010 acquisition itself.

ExxonMobil’s 2010 tender for these bonds came shortly after the acquisition closed. XTO funded that earlier purchase with available cash and intercompany borrowings from ExxonMobil, according to the company’s announcement at the time. The latest filing does not say whether the September 2026 redemption is being funded the same way, so that earlier financing method should not be assumed to apply now.

Once the September 27 redemption is completed and payment is made, the three series will no longer accrue interest and their scheduled 2036, 2037 and 2038 maturities will cease to represent future XTO debt obligations. The next accounting effect should become visible in ExxonMobil’s subsequent financial reporting, where the company can reflect the retirement of the notes and any associated premium or other redemption-related accounting impact.