Gulfmark to price $155 million 10-year notes at mid-week, via Lehman

By Paul Deckelman

New York, July 9 - GulfMark Offshore Inc. is expected to price its previously announced $155 million offering of 10-year senior notes around the middle of the week, following a short roadshow, high-yield syndicate sources said Friday.

The deal will be brought to market via bookrunner Lehman Brothers. Jefferies & Co. and Morgan Stanley Dean Witter are co-managers for the offering, which will be sold under Rule 144A and Regulation S.

There will be a roadshow from Monday through Wednesday, with pricing shortly afterward.

The notes will be subject to a make-whole call for the first five years and will be callable after that at a typical premium schedule.

GulfMark, a Houston-based provider of marine transportation services to the energy industry, is expected to use most of the proceeds of the offering to fund its pending tender offer and related consent solicitation for its $130 million of outstanding 8¾% senior notes due 2008, which is scheduled to expire on July 30, subject to possible extension. New-deal proceeds are also slated to be used to repay bank borrowings and for general corporate purposes.

Standard & Poor's said on Friday that it had assigned a BB- rating to the planned deal, while affirming its existing BB- corporate credit and senior unsecured ratings on GulfMark Offshore. The outlook remains negative.

S&P said the ratings on GulfMark "reflect its position in the volatile and cyclical offshore support vessel industry, high debt leverage and an aggressive growth strategy." Offsetting this risk somewhat, the agency said, are a $100 million credit facility, contract coverage for roughly 65% of vessel days for 2004 and 35% of vessel days for 2005 - accounting for roughly $40 million and $30 million of EBITDA respectively - as well as near-term improvement in GulfMark's North Sea market.

Moody's Investors Service has not yet assigned the deal a rating. It rates the existing notes at B1.

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