Baker Hughes prices capped offer, gets early tenders of $68.5 million

By Wendy Van Sickle

Columbus, Ohio, Dec. 18 – Baker Hughes, a GE Co. announced pricing in subsidiary Baker Hughes, a GE Co., LLC’s capped tender offer for two series of notes on Monday, after reporting earlier in the day that the subsidiary received tenders for $68.5 million of as of the early deadline at 5 p.m. ET on Dec. 15.

As announced Dec. 4, Baker Hughes is offering to purchase the notes for an aggregate maximum purchase price of $175 million excluding accrued interest.

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

As of the early deadline, holders had tendered the following amount of notes, listed in order of priority, according to company update on Monday, with the total considerations listed set using a reference security and fixed spread:

• $6,117,000 of the $112,944,000 8.55% debentures due 2024 with pricing of $1,341.34 per $1,000 principal amount based on the 2.25% U.S. Treasury note due Nov. 15, 2027 for a reference yield of 2.367% plus 40 basis points; and

• $62,386,000 of the $305,788,000 6.875% notes due 2029 with pricing of $1,344.00 per $1,000 principal amount based on the 2.25% U.S. Treasury note due Nov. 15, 2027 for a reference yield of 2.367% plus 80 bps.

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

The total purchase price in each case includes an early tender premium of $50.00 per $1,000 principal amount of notes tendered by the early tender deadline.

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 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For the capped offer, notes may not be withdrawn after the early deadline.

BHGE LLC is funding the notes purchase with some proceeds of the issue of BHGE LLC’s 2.773% senior notes due 2022, 3.337% senior notes due 2027 and 4.08% senior notes due 2047, which closed Dec. 11.

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.

Any-and-all offer

As announced on Dec. 4, the company also was 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 until 5 p.m. ET on Dec. 8.

The company said it took in tenders for $24.92 million principal amount of the 6% notes and $79,805,000 principal amount of the 7.5% notes for purchase on Dec. 11.

The final results excluded notes tendered under guaranteed delivery procedures, the company added.

BHGE LLC funded the notes purchase using some proceeds of the issue of 2.773% senior notes due 2022, 3.337% senior notes due 2027 and 4.08% senior notes due 2047, which also closed Dec. 11.

BHGE LLC plans to call the remaining notes, the release noted.

In the any-and-all offer, pricing was set at 11 a.m. ET on Dec. 8 for each $1,000 principal amount using a reference security and a fixed spread as follows:

• $1,019.40 for the 6% notes due 2018 with pricing set using the 0.875% U.S. Treasury note due May 31, 2018 plus a spread of 40 bps; and

• $1,048.50 for the 7.5% notes due 2018 with pricing based on the 1.25% U.S. Treasury note due Nov. 15, 2018 plus 50 bps.

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.

Baker Hughes is an oilfield services company based in Houston.

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