Baker Hughes prices any-and-all tender offer for 6%, 7.5% notes

By Marisa Wong

Morgantown, W.Va., Dec. 8 – Baker Hughes, a GE Co. subsidiary Baker Hughes, a GE Co., LLC announced pricing for its any-and-all tender offer.

As announced on Dec. 4, the company is tendering for any and all of its $196,873,000 outstanding 6% senior notes due 2018 and its $525,378,000 outstanding 7.5% senior notes due 2018.

Pricing was set at 11 a.m. ET on Dec. 8 using a reference security and a fixed spread as follows:

• The total consideration for each $1,000 principal amount of 6% notes due 2018 is $1,019.40, with pricing set using the 0.875% U.S. Treasury note due May 31, 2018 plus a spread of 40 basis points; and

• The total consideration for each $1,000 principal amount of 7.5% notes due 2018 is $1,048.50, with pricing based on the 1.25% U.S. Treasury note due Nov. 15, 2018 plus 50 bps.

The offer expires at 5 p.m. ET on Dec. 8. Settlement has been set for Dec. 11.

For the any-and-all offer, tendered notes may be withdrawn at any time before the offer ends.

The 6% notes were issued by BJ Services Co. and subsequently assumed by successor Western Atlas Inc., a subsidiary of BHGE LLC. On July 3, BHGE LLC, Baker Hughes Co-Obligor, Inc., Baker Hughes Oilfield Operations, LLC and Baker Hughes International Branches, LLC became co-obligors of the 6% notes.

The 7.5% notes were issued by Baker Hughes Inc. and on July 3 BHGE LLC, as successor to BHI, and the co-obligor became co-obligors of the notes.

Also on Dec. 4, Baker Hughes launched a capped tender offer for two other note series. The company is offering to purchase the following notes for up to a $175 million payment, with the notes listed in order of priority and with pricing based on a reference security and fixed spread:

• $112,944,000 of 8.55% debentures due 2024 with pricing based on the 2.25% U.S. Treasury note due Nov. 15, 2027 plus 40 bps; and

• $305,788,000 of 6.875% notes due 2029 with pricing based on the 2.25% U.S. Treasury note due Nov. 15, 2027 plus 80 bps.

Pricing for the capped offer will be set at 11 a.m. ET on Dec. 18.

The total purchase price will include an early tender premium of $50.00 per $1,000 principal amount of notes tendered by the early tender deadline of 5 p.m. ET on Dec. 8.

Holders also will receive accrued interest up to but excluding the settlement date, which is expected to be Dec. 19 for early tendered notes and Jan. 4 for any remaining tenders.

The aggregate maximum purchase price of $175 million excludes accrued interest.

The maximum tender offers will remain open until midnight ET on Jan. 3.

The 2024 notes were issued by Western Atlas Inc., and on July 3 BHGE LLC, the co-obligor, Baker Hughes Oilfield Operations, LLC and Baker Hughes International Branches, LLC became co-obligors of the notes.

The 2029 notes were issued by BHI and on July 3 BHGE LLC, as successor to BHI, and the co-obligor became co-obligors of the 2029 notes.

For the capped offer, notes may be withdrawn before the early deadline.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) and Barclays (800 438-3242 or 212 528-7581) are the dealer managers. D.F. King & Co., Inc. (866 796-7179, 212 269-5550, bhge@dfking.com or dfking.com/bhge) is the tender and information agent.

Baker Hughes is an oilfield services company based in Houston.

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