Transocean to sell $600 million seven-year secured notes on Tuesday

By Paul A. Harris

Portland, Ore., July 10 – Transocean Pontus Ltd. plans to price a $600 million offering of seven-year senior secured notes (expected ratings B1/BB-) in a quick-to-market Tuesday trade following a mid-morning conference call with investors, according to market sources.

Initial talk has the Rule 144A and Regulation S for life deal coming with a 6½% coupon at 99 to yield approximately 6¾%.

Goldman Sachs & Co. is the left bookrunner. Citigroup Global Markets Inc., Wells Fargo Securities LLC, DNB Markets and Morgan Stanley & Co. LLC are the joint bookrunners.

Barclays, Credit Agricole CIB, SEB, SpareBank and NIBC are the co-managers.

The notes become callable after three years at par plus 75% of coupon. There is a mandatory redemption covering 11% of the issue per year, payable semiannually at par.

The issuer, a wholly owned subsidiary of Steinhausen, Switzerland-based offshore driller Transocean Ltd., plans to use the proceeds to make one or more intercompany loans to subsidiary Transocean Inc. (TINC) or other non-Swiss affiliates of TINC, for the purpose of partially financing the construction or acquisition of the Deepwater Pontus, an ultra-deepwater drillship flagged in the Marshall Islands, and to fund the debt service reserve.

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