By Paul A. Harris
Portland, Ore., Sept. 12 – Diamond Offshore Drilling, Inc. priced an upsized $550 million issue of Diamond Foreign Asset Co. and Diamond Finance, LLC seven-year second-lien senior secured notes (B3/BB-) at par to yield 8˝% in a Tuesday drive-by, according to market sources.
The issue size increased from $500 million.
The yield printed at the tight end of yield talk in the 8 5/8% area and deep inside of initial guidance in the 9% area.
The deal came into the market in front of $350 million of reverse inquiry, a sellside source said.
Goldman Sachs & Co. LLC was the left bookrunner. Joint bookrunners were HSBC Securities (USA) Inc., Barclays and Capital One Securities Inc.
The Katy, Tex.-based drilling contractor plans to use the proceeds, including the incremental proceeds resulting from the $50 million upsize of the deal, to pay off its $100 million senior secured term loan, its senior secured first-lien PIK toggle notes due 2027 and its senior secured revolver, with the remainder, if any, to be used for general corporate purposes, which may include working capital, capital expenditures, share repurchases and acquisitions.
| Issuers: | Diamond Foreign Asset Co. and Diamond Finance, LLC
|
| Amount: | $550 million, increased from $500 million
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| Issue: | Second-lien senior secured notes
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| Maturity: | Oct. 1, 2030
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| Left bookrunner: | Goldman Sachs & Co. LLC
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| Joint bookrunners: | HSBC Securities (USA) Inc., Barclays and Capital One Securities Inc.
|
| Co-managers: | Citigroup Global Markets Inc., Pickering Energy Partners, Fearnley, Clarksons, Raymond James & Associates, DNB Markets Inc., Sparebank and BTIG LLC
|
| Coupon: | 8˝%
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| Price: | Par
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| Yield: | 8˝%
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| Spread: | 421 bps
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| First call: | Oct. 1, 2026 at 104.24
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| Trade date: | Sept. 12
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| Settlement date: | Sept. 21
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| Ratings: | Moody’s: B3
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| S&P: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 8 5/8% area
|
| Marketing: | Drive-by
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