Ocean Rig talks $500 million five-year notes to yield in 7¼% area

By Paul A. Harris

Portland, Ore., March 19 - Ocean Rig UDW Inc. talked its $500 million offering of five-year senior notes (Caa1) to yield in the 7¼% area, an informed source said on Wednesday.

Books close at 11 a.m. ET on Thursday, and the deal is set to price thereafter.

Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the joint bookrunners for the Rule 144A and Regulation S for life offering.

The notes become callable after 2.5 years at par plus 75% of the coupon and feature a 35% 2.5-year equity clawback and a 101% poison put.

The Nicosia, Cypress-based offshore drilling contractor plans to use the proceeds, together with other available funds, to repurchase or redeem its 9½% senior notes due 2016.

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