RDS Ultra-Deepwater talks $260 million seven-year notes to yield 12½% area with about 3 points OID

By Paul A. Harris

St. Louis, Feb. 22 - RDS Ultra-Deepwater, Ltd. set price talk for its $260 million offering of seven-year senior secured notes (B3) on Monday, according to an informed source.

The notes are talked to come with a 12½% area yield, including an original issue discount of approximately 3 points.

The books close at 3 p.m. ET on Tuesday. Pricing is set for early Wednesday morning.

Jefferies & Co. has the books for the Rule 144A and Regulation S for life deal.

The notes come with four years of call protection.

Proceeds will be used to purchase PetroRig III, a sixth generation ultra-deepwater semi-submersible drilling rig.

The company will enter into a long-term charter contract for the lease of the rig with Pemex Exploracion y Produccion, a wholly owned subsidiary of Petroleos Mexicanos, the national petroleum company of Mexico.

RDS Ultra-Deepwater is a special purpose finance subsidiary of Portuguese parent Rubicon Drilling Services-Alguer de Equipamentos Tecnologicos, Unipessoal, LDA.

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