Transocean talks $1.5 billion seven-year senior notes with 9% coupon at 98-99 OID

By Paul A. Harris

Portland, Ore., July 7 – Transocean Inc. (RIG) talked its $1.5 billion offering of seven-year senior notes (B1/BB-) with a 9% coupon at an original issue discount of 98 to 99, a syndicate source said.

Books close at 1 p.m. ET on Thursday, with pricing of the Rule 144A and Regulation S for life deal to come thereafter.

Morgan Stanley & Co. LLC and Goldman Sachs & Co. are the joint bookrunners.

Barclays, BNP Paribas Securities Corp., BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, DNB, MUFG, Standard Chartered and Wells Fargo Securities LLC are the co-managers.

The notes come with three years of call protection.

The Zug, Switzerland-based drilling contractor plans to use the proceeds to fund tender offers for $1 billion of its 6½% senior notes due 2020, its 6 3/8% senior notes due 2021 and its 3.8% senior notes due 2022, and for general corporate purposes.

Early guidance had the seven-year notes coming with a yield in the low 9% context, according to market sources.

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