Ensign Drilling talks $700 million five-year notes to yield 9% to 9¼%, books close Friday

By Paul A. Harris

Portland, Ore., April 5 – Ensign Drilling Inc. talked its $700 million offering of five-year senior notes (B2/BB-) to yield 9% to 9¼%, according to a syndicate source.

The deal underwent covenant changes bearing primarily upon how the company may disburse cash and incur additional debt.

Books close at 2:30 p.m. ET on Friday.

BMO Capital Markets Corp. is the left physical bookrunner. J.P. Morgan Securities LLC is the joint physical bookrunner. Scotia Capital is the joint bookrunner. AltaCorp, HSBC and TD Securities are the co-managers.

The offer is coming in the Rule 144A and Regulation S formats, and as a private placement in Canada.

The notes become callable after two years at par plus 50% of the coupon, feature a 35% equity clawback at par plus the coupon during the non-call period and a 101% poison put.

The Calgary-based oilfield services provider plans to use the proceeds to repay debt.

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