Ocean Rig talks $750 million five-year notes with 6 7/8% area yield

By Paul A. Harris

Portland, Ore., Sept. 12 - Cypress-based Ocean Rig UDW Inc. talked its $750 million offering of five-year senior secured notes (/B/) with a yield in the 6 7/8% area, an informed source said on Wednesday.

The deal is set to price Thursday.

Deutsche Bank Securities Inc., Morgan Stanley & Co. and DNB Markets are the joint bookrunners for the Rule 144A for life offering.

The notes come with three years of call protection.

Proceeds will be used to fully repay all outstanding debt under the company's $1.04 billion senior secured credit facility, amounting to about $487.5 million as of June 30, 2012, and for the purposes of financing offshore drilling rigs.

The issuing entity will be Drill Rig Holdings, Inc., a wholly owned subsidiary of the Nicosia, Cyprus-based deepwater drilling services provider.

Ocean Rig is a subsidiary of Athens-based DryShips Inc.

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