Diamond Offshore Drilling obtains $950 million five-year revolver

By Sarah Lizee

Olympia, Wash., Oct. 4 – Diamond Offshore Drilling, Inc. and subsidiary Diamond Foreign Asset Co. entered into on Tuesday a $950 million revolving credit agreement due Oct. 2, 2023 with Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings bear interest at Libor plus 275 basis points to 425 bps, and the commitment fee ranges from 37.5 bps to 70 bps, both based on credit ratings.

There is a $500 million accordion feature.

The facility includes a $100 million swingline subfacility and a $250 million letter-of-credit subfacility. Letters of credit may be issued in dollars or alternative currencies.

Borrowings may be used for general corporate purposes, including investments, acquisitions and capital expenditures.

The new credit agreement contains financial covenants applicable to the company and its subsidiaries, including maintenance of a ratio of consolidated debt to total capitalization not to exceed 60% at the end of each fiscal quarter.

The facility was undrawn at closing.

Wells Fargo Securities, LLC, JPMorgan Chase Bank, NA, HSBC Securities (USA) Inc., Citigroup Global Markets Inc., SunTrust Robinson Humphrey, Inc., Barclays Bank plc and MUFG Bank, Ltd. are joint lead arrangers and bookrunners. JPMorgan and HSBC are co-syndication agents. Citigroup, SunTrust Bank, Barclays and MUFG are co-documentation agents.

Existing facility amendment

Also on Tuesday, Diamond Offshore amended its existing credit agreement to, among other things, permit the entry by the company into the new credit agreement and reduce commitments.

The commitment reduction results in the new credit agreement lenders having no commitments under the existing credit agreement and reduces the total principal amount of commitments under the existing credit agreement to $325 million.

Wilmington Trust, NA was appointed as successor administrative agent under the amended agreement.

Under the existing credit agreement, $40 million of the commitments mature on March 17, 2019, $60 million of the commitments mature on Oct. 22, 2019 and $225 million of the commitments mature on Oct. 22, 2020.

As of Tuesday, no borrowings or letters of credit were outstanding under the existing credit agreement.

The offshore oil and gas drilling contractor is based in Houston.

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