By Stephanie N. Rotondo
Seattle, Jan. 10 – Nabors Industries Inc. priced $500 million of seven-year exchangeable senior unsecured notes at par to yield 0.75% with an initial exchange premium of 40% on Tuesday, the company said in a press release.
The deal came at the rich end of talk for a 0.75% to 1% yield and a 40% initial exchange premium.
Citigroup Global Markets Inc. and Goldman Sachs & Co. led the Rule 144A deal.
There is a $75 million over-allotment option.
The exchange rate is 39.7488 shares per each $1,000 of notes, representing $25.16 per share. Exchanges will be settled with cash, common stock, or a combination, at the company’s option.
The notes have contingent conversion.
Holders can put the notes during certain periods and in certain circumstances.
In connection with the offering, Nabors will enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their affiliates. The capped call transactions will cover the number of common shares that will initially underlie the notes and are expected to reduce potential dilution.
The capped call will increase the effective exchange premium from the company’s perspective to 75% and an exchange price of $31.4475.
Additionally, the counterparties are expected to enter into various derivative transactions connected with the offering.
Proceeds will be used to prepay the remaining balance of the subsidiary’s unsecured term loan due 2020, as well as to pay the cost of the capped call transactions. Any remaining proceeds will be used for general corporate purposes, including to repay or repurchase other debt.
The company is a wholly owned subsidiary of Hamilton, Bermuda-based Nabors Industries Ltd., an oil and gas drilling contractor.
| Issuer: | Nabors Industries Inc.
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| Securities: | Exchangeable senior unsecured notes
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| Amount: | $500 million
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| Greenshoe: | $75 million
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| Maturity: | Jan. 15, 2024
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| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co.
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| Coupon: | 0.75%
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| Price: | Par of $1,000
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| Yield: | 0.75%
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| Exchange rate: | 39.7488 shares
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| Exchange price: | $25.16
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| Exchange premium: | 40%
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| Pricing date: | Jan. 10
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| Settlement date: | Jan. 13
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| Distribution: | Rule 144A
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| Talk: | 0.75% to 1% yield, with a conversion premium of 40%
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| Stock symbol: | NYSE: NBR
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| Stock price: | $17.97 as of Jan. 9 close
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| Market capitalization: | $4.98 billion
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