By Kenneth Lim
Boston, Dec. 8 - Superior Energy Services Inc. on Thursday priced $400 million of 20-year exchangeable senior notes within talk, at a coupon of 1.5% and an initial exchange premium of 35%.
The deal amount includes $50 million from an over-allotment option that was immediately exercised.
The notes were offered at par. They were talked at a coupon of 1.25% to 1.75% and an initial exchange premium of 32.5% to 37.5%.
The notes were issued by Superior Energy subsidiary SESI LLC and are exchangeable into shares of Superior Energy common stock. The listed company also guarantees the exchangeables.
Bear Stearns and Lehman Brothers are the bookrunners of the Rule 144A offering.
The coupon will decline to 1.25% beginning Dec. 15, 2011.
The notes are non-callable for the first three years. They may be called in years four and five, subject to a hurdle at 175% of the exchange price, and are freely callable after that. The notes may be put in years five, 10 and 15.
There is a contingent exchange hurdle at 135% of the exchange price.
The notes have full dividend and takeover protection.
There is a net-share settlement feature.
Superior Energy, a Harvey, La.-based oilfield services and equipment provider, said it will use the proceeds and some of its available cash to repurchase up to $160 million of its common stock concurrently with the offering. It will also use $233 million of the proceeds to pay the $175 million consideration of its Warrior Energy Services Corp. acquisition, to refinance its existing debt and to pay for expenses related to the acquisition.
| Issuer: | SESI LLC
|
| Issue: | Exchangeable senior notes
|
| Exchange property: | Superior Energy Services Inc. common stock
|
| Bookrunners: | Bear, Stearns & Co. Inc. and Lehman Brothers
|
| Amount: | $400 million, including $50 million greenshoe already exercised
|
| Greenshoe: | $50 million, already exercised
|
| Maturity: | Dec. 15, 2026
|
| Coupon: | 1.5%, declines to 1.25% beginning Dec. 15, 2011
|
| Price: | Par
|
| Yield: | 1.5%, declines to 1.25% beginning Dec. 15, 2011
|
| Exchange premium: | 35%
|
| Exchange price: | $45.58
|
| Exchange ratio: | 21.9414
|
| Contingent exchange: | 135%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Dec. 15, 2009; callable subject to 175% hurdle before Dec. 15, 2011
|
| Puts: | Dec. 15, 2011; Dec. 15, 2016; Dec. 15, 2021
|
| Price talk: | 1.25%-1.75%, up 32.5%-37.5%
|
| Pricing date: | Dec. 7, after the close
|
| Settlement date: | Dec. 12
|
| Guarantees: | Superior Energy Services Inc.
|
| Distribution: | Rule 144A
|
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