By Paul Deckelman
New York, Nov. 21 - Superior Energy Services, Inc. priced an upsized, quick-to-market $800 million issue of 10-year senior notes on Monday, high-yield syndicate sources said, with the new bonds coming in at par to yield 7 1/8%.
That was slightly wide of the unofficial 7% price talk, which had circulated earlier in the day.
The issue was upsized from the originally announced $700 million.
The Rule 144A/Regulation S transaction, which was sold with registration rights, was done through Superior's SESI, LLC subsidiary.
The deal came to market via joint bookrunners J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Wells Fargo Securities LLC.
Capital One Southcoast, Inc., RBC Capital Markets Corp. and Scotia Capital (USA) Inc. were joint lead managers on the deal.
CIBC, Citigroup Global Markets Inc., Comerica Securities, Inc., HSBC Securities (USA) Inc., Morgan Keegan & Co. Inc., BBVA Securities Inc., PNC Capital Markets LLC, Standard Chartered Bank and Johnson Rice & Co. LLC were co-managers on the offering.
New Orleans-based Superior, a provider of specialized oilfield services and equipment, plans to use the new-deal proceeds - along with cash on hand and term loan and revolving credit borrowings from its to-be-amended senior credit facility - to pay for the cash portion of its pending acquisition of Complete Production Services Inc.
Proceeds will also be used to repay Complete's outstanding 8% notes due 2016, as well as to pay any amounts outstanding under Complete's revolving credit facility, which will be terminated, and to cover related fees and expenses.
Superior and smaller Houston-based oilfield services rival Complete Production announced their merger plans on Oct. 10. Under the terms of the transaction, Superior will pay roughly $2.7 billion in cash and stock for Complete, or about $32.90 per share, broken up into $7 in cash and 0.945 Superior shares for each share of Complete.
Superior executives estimated that the cash portion of the transaction would amount to $570 million, or 21% of the total price, and the stock portion $2.13 billion, or 79%. The deal also includes Superior's assumption and repayment of $650 million of Complete debt, all of it in the outstanding 8% notes.
Earlier this year, Complete entered into an expanded $300 million revolver. According to the most recent 10-Q report filed with the Securities and Exchange Commission, Complete had no outstanding revolver borrowings as of the end of the third quarter on Sept. 30, although it did have nearly $23 million of outstanding letters of credit.
| Issuer: | SESI, LLC
|
| Amount: | $800 million, upsized from $700 million
|
| Maturity: | Dec. 15, 2021
|
| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Wells Fargo Securities LLC.
|
| Lead managers: | Capital One Southcoast, Inc., RBC Capital Markets Corp. and Scotia Capital (USA) Inc.
|
| Co-Managers: | CIBC, Citigroup Global Markets Inc., Comerica Securities, Inc., HSBC Securities (USA) Inc., Morgan Keegan & Co. Inc., BBVA Securities Inc., PNC Capital Markets LLC, Standard Chartered Bank and Johnson Rice & Co. LLC
|
| Coupon: | 7 1/8%
|
| Price: | Par
|
| Yield: | 7 1/8%
|
| Spread: | 517 bps over UST 2% due Nov. 15, 2021
|
| Call protection: | Make-whole call at T+50bps until Dec. 15, 2016, then callable at 103.563, 102.375, 101.188, and at par on or after Dec. 15, 2019
|
| Equity clawback: | Up to 35% of issue at 107.125 until Dec. 15, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | Nov. 21
|
| Settlement date: | Dec. 6
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's BB+
|
| Distribution: | 144A/Regulation S with Registration Rights
|
| Price talk: | 7% area
|
| Marketing: | Quick-to-market
|
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