By Paul A. Harris
Portland, Ore., April 11 – Transocean Inc., known by its stock ticker, RIG, priced an upsized $1.8 billion of priority guaranteed notes (Caa1/B-) in two tranches in a Thursday drive-by, according to market sources.
The deal, which increased in size from $1.5 billion, included a $900 million tranche of five-year notes that priced at par to yield 8¼%, at the tight end of the 8¼% to 8½% yield talk.
The issue also included a $900 million tranche of seven-year notes that priced at par to yield 8½%, at the tight end of the 8½% to 8¾% yield talk.
Demand was heard to be $5.6 billion across both tranches, a trader said.
Citigroup was the left bookrunner. Joint bookrunners were DNB, Goldman Sachs, Wells Fargo, Morgan Stanley and SpareBank.
The notes are guaranteed by parent company Transocean Ltd.
The Switzerland-based offshore drilling contractor plans to use the proceeds to fund tender offers to purchase any and all of its outstanding 11½% senior guaranteed notes due 2027 and its 7¼% senior notes due 2025, and to redeem any notes not tendered, with the remaining proceeds to be used to redeem its other priority guaranteed notes. The incremental proceeds resulting from the $300 million upsize will also be used to redeem priority guaranteed notes.
| Issuer: | Transocean Inc.
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| Guarantor: | Transocean Ltd.
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| Amount: | $1.8 billion, increased from $1.5 billion
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| Issue: | Priority guaranteed notes
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| Left bookrunner: | Citigroup
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| Joint bookrunners: | DNB, Goldman Sachs, Wells Fargo, Morgan Stanley and SpareBank
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| Co-manager: | Standard Bank
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| Trade date: | April 11
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| Settlement date: | April 18
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| Ratings: | Moody’s: Caa1
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| S&P: B-
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Drive-by
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| Five-year notes
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| Amount: | $900 million
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| Tenor: | Five years
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| Coupon: | 8¼%
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| Price: | Par
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| Yield: | 8¼%
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| Call protection: | Two years
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| Price talk: | 8¼% to 8½%
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| Seven-year notes
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| Amount: | $900 million
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| Tenor: | Seven years
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| Coupon: | 8½%
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| Price: | Par
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| Yield: | 8½%
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| Call protection: | Three years
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| Price talk: | 8½% to 8¾%
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