Ocean Rig marketing $500 million eight-year notes offering

By Paul A. Harris

Portland, Ore., July 8 – Ocean Rig UDW Inc. announced on Tuesday that it plans to sell $500 million of eight-year senior secured notes via subsidiaries Drillships Ocean Ventures Inc. and Drillships Ventures Projects Inc.

The Rule 144A and Regulation S deal, which is being led by joint bookrunners Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC, is expected to price mid-to-late in the week ahead, according to a market source.

The notes come with three years of call protection. A special call allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

The notes initially will be guaranteed by Ocean Rig and certain of the issuers’ existing and future subsidiaries, and by a security interest in the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena, and by a pledge of the stock of the issuers and the subsidiary guarantors.

Credit ratings remain to be determined.

Proceeds, together with a new $800 million term loan and cash on hand, will be used to repay the company’s existing $1.35 billion term loan in full.

Deepwater driller Ocean Rig is a majority owned subsidiary of DryShips Inc., which is based in Nicosia, Cyprus.

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