Seadrill Partners amends loans to insulate from Seadrill bankruptcy

By Caroline Salls

Pittsburgh, Aug. 17 – Seadrill Partners LLC completed amendments to three secured credit facilities that relate to rigs purchased by the company from Seadrill Ltd. that will insulate Seadrill Partners from events of default related to Seadrill Ltd.’s likely use of Chapter 11 proceedings to implement its restructuring plan, according to a news release.

The company said the amendments to the three facilities remove Seadrill Ltd. and its consolidated entities as a borrower or guarantor, separate the facilities so that the resulting Seadrill Partners facilities are secured only by its assets without recourse to Seadrill Ltd. or its assets, and extend the maturities of the resulting Seadrill Partners facilities by 2˝ years.

As part of this transaction, Seadrill Partners said it agreed to a prepayment of $100 million upon closing and two subsequent prepayments of $25 million, one of which will be made six months after closing and another of which will be made 12 months after closing.

These payment obligations will be distributed across the three resulting Seadrill Partners facilities.

The company said it also agreed to covenant and security amendments and to cancel the $100 million revolving credit facility provided by Seadrill Ltd.

According to the release, Seadrill Partners’ existing management and operational arrangements with Seadrill Ltd. will remain in place, and its business operations remain unaffected by Seadrill Ltd.’ restructuring efforts.

Seadrill Partners said it deferred distributions to common unitholders in April pending completion of this transaction, and distributions will resume at the same level as before the deferral.

As a result, the company declared a quarterly cash distribution for the first and second quarters of $0.10 per unit for each quarter.

This cash distribution will be paid on or about Sept. 5 to all unitholders of record as of the close of business on Aug. 29.

The London company owns and operates offshore drilling rigs.

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