Weatherford prices tender offer for $350 million 6.625% senior notes

By Susanna Moon

Chicago, Sept. 22 - Weatherford International Ltd. announced the reference yield and the total purchase price it will pay for Weatherford International, Inc.'s $350 million of outstanding 6.625% senior notes due Nov. 15, 2011 in its cash tender offer.

Weatherford will pay $1,065.75 for each $1,000 principal amount of 6.625% notes tendered in the offer.

Pricing was determined at 2 p.m. ET on Sept. 22. The total price for the 6.625% notes was based on the reference yield using the 1.75% U.S. Treasury note due Nov. 15, 2011 plus a fixed spread plus 50 basis points. The reference yield was 0.339%.

The tender offer's expiration is 11:59 p.m. ET on Sept. 22. It is conditioned upon completion of the company's offering of $1.4 billion of senior notes, expected to close on Sept. 23.

In a second tender offer, Weatherford International Inc. is offering to purchase its $600 million of outstanding 5.95% senior notes due June 15, 2012 and Weatherford International Ltd. is offering to purchase $500 million of its outstanding 5.15% senior notes due March 15, 2013 and $250 million of 4.95% senior notes due Oct. 15, 2013.

The principal amount of notes to be purchased in the maximum tender offer will be equal to the difference between $700 million and the principal amount of notes purchased through the first offer.

The amounts of each series of notes that may be purchased in the maximum tender offer are prioritized in the order listed above and may be prorated.

The second offer is scheduled to expire at 5 p.m. ET on Oct. 20.

The purchase price for the second offer includes a premium of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Sept. 29, the early tender date.

Holders who tender their notes after the early tender date but by the expiration will receive the total purchase price minus $30 per note.

Notes may be validly withdrawn at any time before their respective expiration dates.

Pricing for the second offer will be determined based on a fixed spread over the yield based on the bid-side price of a U.S. Treasury security, as calculated by the dealer managers at 2 p.m. ET on Oct. 20.

The fixed spread is 70 bps for the 5.95% notes, 100 bps for the 5.15% notes and 140 bps for the 4.95% notes.

The reference U.S. Treasury security is the 0.375% Treasury note due Aug. 31, 2012 for the 5.95% notes, the 0.75% Treasury note due Sept. 15, 2013 for the 5.15% notes and the 0.75% Treasury note due Sept. 15, 2013 for the 4.95% notes.

Holders also will receive accrued interest up to but not including the settlement date.

The settlement dates for the any and all offer and the maximum tender offer will follow promptly after the applicable expiration dates and currently are expected to be Sept. 23 and Oct. 21, respectively.

Deutsche Bank Securities Inc. (866 627-0391), Morgan Stanley & Co. Inc. (800 624-1808) and UBS Securities LLC (888 719-4210) are the joint lead dealer managers, and Global Bondholder Services Corp. (866 470-3700) is the depositary and information agent for the tender offers.

Weatherford is a Geneva-based multinational oilfield services company.

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