Diamond Offshore draws $400 million under a revolver, cancels another

By Wendy Van Sickle

Columbus, Ohio, March 23 – Diamond Offshore Drilling, Inc. and subsidiary Diamond Foreign Asset Co. provided notice to their lenders to borrow $400 million under their 2018 credit facility on March 17, according to an 8-K filing with the Securities and Exchange Commission.

Other than the drawdown and a $6 million financial letter of credit issued in January in support of a previously issued surety bond, the company has no other borrowings outstanding under the credit facility with Wells Fargo Bank, NA as administrative agent. The current interest rate for borrowings under the credit facility is 5.21%, the company reported.

Diamond Offshore said it increased its borrowings as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak.

Proceeds may be used for general corporate purposes, including investments, capital expenditures and other purposes permitted.

The company also announced that on March 17 it terminated its 2012 credit agreement, which had $225 million of commitments scheduled to mature in October 2020. There were no borrowings outstanding under that credit agreement.

The offshore oil and gas drilling contractor is based in Houston.

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