Drillships Financing raises pricing on $1.8 billion in term loans

By Sara Rosenberg

New York, June 27 - Drillships Financing Holding Inc. (Ocean Rig) increased pricing on its $900 million seven-year and eight-month term loan B-1 to Libor plus 500 basis points from the Libor plus 450 bps area and on its $900 million three-year and two-month term loan B-2 to Libor plus 450 bps from the Libor plus 375 bps area, according to a market source.

Also, the original issue discount talk on the term loan B-1 was changed to 98 to 98½ from 99 and on the term loan B-2 to 99 from 991/2, the source said.

Furthermore, the B-1 tranche now has hard call protection of 102 in year one and 101 in year two, instead of just 101 soft call protection for one year.

Lastly, the two term loans saw the addition of a net debt to EBITDA covenant whereas before they were no financial covenants.

As before, both term loans have a 1% Libor floor and the B-2 loan has 101 soft call protection for one year.

Security is a first-lien interest in the Corcovado, Olympia, Poseidon, and Mykonos drillships.

Commitments for the $1.8 billion first-lien secured deal (B2/B+) are due at 5 p.m. ET on July 1.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Barclays and Goldman Sachs Bank USA are the joint lead arrangers and bookrunners on the loans, with Deutsche and Credit Suisse the global coordinators.

Proceeds will be used to refinance the existing secured bank debt at both Drillships Holdings Inc. and Drillships Investment Inc.

Parent company Ocean Rig is a Nicosia, Cyprus-based international offshore drilling contractor.

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