Nabors greenshoe exercise increases exchangeables to $575 million

By Angela McDaniels

Tacoma, Wash., Jan. 13 – The underwriters of Nabors Industries Inc.’s 0.75% seven-year exchangeable senior notes exercised their $75 million over-allotment in full, according to an 8-K filing with the Securities and Exchange Commission.

The greenshoe exercise increased the size of the issue to $575 million.

As previously reported, the company priced $500 million of the exchangeables on Tuesday at par with an initial exchange premium of 40%.

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. The syndicate also included BofA Merrill Lynch, Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc., MUFG Securities Americas Inc., Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, PNC Capital Markets LLC, BBVA Securities Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., and ANZ Securities, Inc.

The notes are exchangeable for shares of parent company Nabors Industries Ltd., which guarantees the notes. At the company’s option, exchanges will be settled with cash, common stock or a combination.

Initially, the notes have contingent conversion. Beginning Dec. 15, 2023, they are freely exchangeable.

In connection with the offering, Nabors entered into privately negotiated capped call transactions that increase the effective exchange premium from its perspective to 75%.

Proceeds will be used to prepay $162.5 million outstanding under the subsidiary’s term loan due 2020, to pay the cost of the capped call transactions and for general corporate purposes, including to repay or repurchase other debt.

Nabors Industries is a Hamilton, Bermuda-based an oil and gas drilling contractor.

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