Transocean to trade 0.5% exchangeable, 7¼% notes for new exchangeables; additional issuance eyed

By Wendy Van Sickle

Columbus, Ohio, Sept. 13 – Transocean Ltd. executed private exchange agreements to swap some of the 0.5% exchangeable bonds due 2023 and some of the 7¼% priority guaranteed senior notes due 2025 issued by wholly owned subsidiary Transocean Inc. for new exchange notes and will issue additional new exchangeable notes for a total amount of $300 million principal amount of new notes, according to a news release.

Transocean agreed to exchange $73 million of the existing exchangeable bonds for $73 million of new 4.625% senior guaranteed exchangeable bonds due 2029 to be issued by Transocean Inc. and warrants to subscribe for Transocean shares equal to 31.5% of the aggregate number of Transocean shares underlying the new exchangeable bonds.

The company also agreed to exchange $43.3 million principal amount of its 2025 priority guaranteed notes for $38.9 million aggregate principal amount of the new exchangeable bonds.

Transocean also agreed to sell $188.1 million principal amount of additional new exchangeable bonds and issue new and additional warrants to subscribe for warrant shares equal to 28.3% of the total number of Transocean shares underlying those new exchangeable bonds.

The new exchangeable bonds will be guaranteed by Transocean Ltd. and some indirect holding company subsidiaries of Transocean Inc.

The new exchangeable bonds will have an initial exchange premium of 22.5%.

They will be redeemable on or after March 30, 2026 if the closing price of Transocean’s shares has exceeded 115% of the exchange price for at least 20 trading days in a consecutive 30-day trading period, subject to a make-whole payment through March 30, 2028.

Each warrant will be exercisable for one warrant share, either in full or in part, any time until 5 p.m. ET on March 13, 2026, at an exercise price equal to a 32.25% premium to the volume-weighted average price.

Transocean intends to use the proceeds from the sale of the additional new securities to repurchase approximately $13.8 million in outstanding principal of the 2025 notes for approximately $11.7 million plus accrued interest, and for general corporate purposes, which may include the repurchase of additional debt securities, capital expenditures and working capital.

Transocean is an offshore oil and drilling contractor based in Steinhausen, Switzerland.

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