Israel’s Leviathan sets tranches, talk in $2.25 billion four-part notes offering; pricing Tuesday

By Paul A. Harris

Portland, Ore., Aug. 4 – Leviathan Bond Ltd. set tranche sizes and price talk in its $2.25 billion four-part offering of senior secured bullet notes (Ba3/BB-/BB), according to a market source.

The deal shapes up as follows:

• $500 million three-year notes talked to yield in the 5¾% area versus initial talk in the 5 7/8% area;

• $600 million five-year notes talked to yield 6 1/8% to 6¼% versus initial talk in the 6 3/8% area;

• $600 million seven-year notes talked to yield 6½% to 6 5/8% versus initial talk in the 6¾% area; and

• $550 million 10-year notes talked to yield 6 7/8% to 7% versus initial talk in the 7¼% area.

Pricing is expected on Tuesday.

JPMorgan is the lead left bookrunner. HSBC, BNP Paribas and Goldman Sachs are the joint bookrunners.

The issuer is a special purpose vehicle for a natural gas production field off of Israel's Mediterranean coast. The project is owned by Delek Group and Ratio Oil Exploration Co., both of Israel, and Houston-based Noble Energy, Inc. (on July 20 Chevron Corp. announced it would acquire Noble in an all-stock transaction valued at $5 billion).

The notes are secured by Delek Drilling LP’s 45.34% working interest in the Leviathan project.

Proceeds will be used to repay a Leviathan capital expenditures facility, as well as the Delek Drilling term loan, also to fund a debt payment fund required balance and for general corporate purposes.

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