By Paul A. Harris
Portland, Ore., Sept. 28 – Shelf Drilling, Ltd. priced an upsized $1.095 billion issue of Shelf Drilling Holdings Ltd. 9 5/8% 5.5-year senior secured notes (B3/B-/B) at 98.184 to yield 10 1/8% on Thursday, according to market sources.
The issue size increased from $1.075 billion.
The yield printed in the middle of the 10% to 10¼% yield talk. The issue price came in line with discount talk of approximately 2 points. Early guidance had the notes coming with an all-in yield of 10¼%, including about 2 points of OID.
The deal, which was extensively telegraphed to investors (including high-yield bond investors in the United States), was playing to around $3.1 billion of demand on Thursday morning, according to a sellside source in New York.
Goldman Sachs International was the left bookrunner. Joint bookrunners were DNB, JPMorgan, Santander and SB1.
The United Arab Emirates-based shallow water offshore driller plans to use the proceeds plus $55 million of proceeds from an equity offering and a $50 million term loan A to refinance $310 million of senior secured notes due November 2024 and $900 million of senior unsecured notes due February 2025. Incremental proceeds resulting from the $20 million upsize of the deal will be used to offset the original issue discount.
Approximately 7% of the notes will be subject to a mandatory redemption in $37.5 million semiannual payments beginning in October 2024. That provision will remain for the life of the notes.
| Issuer: | Shelf Drilling Holdings, Ltd.
|
| Amount: | $1.095 billion, increased from $1.075 billion
|
| Issue: | Senior secured notes
|
| Maturity: | April 15, 2029
|
| Left bookrunner: | Goldman Sachs International
|
| Joint bookrunners: | DNB, JPMorgan, Santander and SB1
|
| Co-managers: | Arctic Securities, Clarksons Securities and Fearnley Securities
|
| Coupon: | 9 5/8%
|
| Price: | 98.184
|
| Yield: | 10 1/8%
|
| Spread: | 541 bps
|
| Call protection: | Two years
|
| Trade date: | Sept. 28
|
| Settlement date: | Oct. 13
|
| Ratings: | Moody’s: B3
|
| S&P: B-
|
| Fitch: B
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 10% to 10¼%, including approximately 2 points OID
|
| Marketing: | Roadshow
|
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