Schlumberger starts roadshow Friday for $262.6 million Hanover Compressor seller notes

By Paul A. Harris

St. Louis, Nov. 20 - The roadshow starts Friday for a seller note offering in which Schlumberger Ltd. will sell $262.62 million principal amount of Hanover Compressor Co. zero-coupon subordinated notes due March 31, 2007 (B-), according to an informed source.

The deal is expected to price on Dec. 2.

Goldman Sachs & Co. will run the books on the registered notes sale.

The notes have an accretion rate 11%. They will be non-callable before March 31, 2006, then at a price of 102.5% of the accreted value.

Schlumberger will use proceeds to repay its corporate debt. Hanover Compressor will receive no proceeds from the sale.

The notes were issued to Schlumberger on May 14 when Hanover Compressor agreed with Schlumberger to restructure a $150 million seller note and $23 million of accrued paid-in-kind interest into the new securities. The seller note was issued in Hanover's August 2001 acquisition of Production Operators Corp.

Schlumberger Ltd. is an oil well services and equipment company headquartered in New York. Hanover Compressor Co. is a provider of natural gas compression and service, fabrication and equipment for natural gas processing and transportation applications, based in Houston.

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