By Paul A. Harris
Portland, Ore., May 2 - KCA Deutag Finance plc priced a $500 million issue of 9 5/8% five-year senior secured notes (B3/B) at 96 to yield 10.681% on Thursday, according to a market source.
The coupon came 12.5 basis points below the 9¾% coupon talk. The reoffer price came on top of price talk.
The notes feature a 50 bps coupon step-up after 12 months and an additional 100 bps step-up after 24 months if the sum of the outstanding term loans is $500 million or greater.
J.P. Morgan Securities LLC, BofA Merrill Lynch, HSBC, Lloyds TSB and Morgan Stanley & Co. were the joint bookrunners.
The notes, which are being issued by the Aberdeen, Scotland-based oil and gas services company's Globe Luxembourg SCA entity, come pari passu with existing bank debt.
Earlier this year KCA Deutag ran a March 18 to March 22 roadshow for an $860 million offering of seven-year senior secured notes.
The deal was sidelined because the company and bond investors were unable to come to agreement on the interest rate, according to market sources.
As with the prior deal, the company plans to use the proceeds from the proposed first-lien notes to repay debt.
| Issuer: | Globe Luxembourg SCA (KCA Deutag Finance plc)
|
| Face amount: | $500 million
|
| Proceeds: | $480 million
|
| Maturity: | May 1, 2018
|
| Securities: | Senior secured notes
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch, HSBC, Lloyds TSB, Morgan Stanley & Co.
|
| Co-manager: | Natixis
|
| Coupon: | 9 5/8%
|
| Coupon step-ups: | 50 bps after 12 months and an additional 100 bps after 24 months if the sum of outstanding term loans is $500 million or greater
|
| Price: | 96
|
| Yield: | 10.681%
|
| Spread: | 898 bps
|
| First call: | May 1, 2017 at 105
|
| Trade date: | May 2
|
| Settlement date: | May 9
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 9¾% at 96
|
| Marketing: | Roadshow
|
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