Schlumberger subsidiaries start tender offers for five series of notes

By Angela McDaniels

Tacoma, Wash., Sept. 22 - Schlumberger Ltd. subsidiaries Schlumberger Technology Corp. and Smith International, Inc. began three tender offers for five series of notes, according to news releases from the companies.

Schlumberger Technology is offering to purchase any and all of its $649,245,000 of 6.5% senior notes due 2012.

The purchase price will be determined by reference to the bid-side yield of the 1.375% Treasury security due April 15, 2012 plus 20 basis points.

In a second tender offer, Smith International will purchase any and all of its $220 million of 6.75% senior notes due 2011.

The purchase price for the 6.75% notes will be set using the bid-side yield on the 5% Treasury note due Feb. 15, 2011 plus 35 bps.

The tender offers for the 6.5% notes and 6.75% notes will expire at 5 p.m. ET on Sept. 28.

In a third offer, Smith International will spend up to $1 billion to repurchase its $300 million of 8.625% notes due 2014, $275 million of 6% senior notes due 2016 and $700 million 9.75% notes due 2019.

For each $1,000 principal amount, the company will pay $1,235 for the 8.625% notes, $1,205 for the 6% notes and $1,450 for the 9.75% notes.

These figures include an early tender premium of $30 for each note tendered by Oct. 5.

If the amount of notes tendered have a total purchase price of more than $1 billion, the amount of notes purchased will be prorated.

The third tender offer will expire on Oct. 20.

In all cases, noteholders will also receive accrued interest up to but excluding the applicable settlement date.

The dealer managers are Citi (800 558-3745 or 212 723-6106), JPMorgan (866 834-4666 or 212 834-2494) and Morgan Stanley (800 624-1808 or 212 761-5384). The information agent is Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 804-2200).

Houston-based Schlumberger supplies technology, project management and information solutions to the oil and gas industry.

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