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Thursday, December 8, 2016

Seadrill Obtains US$1.35-bln Bank Credit Reflnancing

July 10, 2014

Offshore Drill Ship: Photo courtesy of Seadrill

Offshore Drill Ship: Photo courtesy of Seadrill

Seadrill Limited informs it has received commitments from 17 banks for a US$1.35 billion credit facility with a 5 year term and 10 year amortization profile to refinance the credit facilities secured by the West Pegasus, West Gemini, and West Orion.

The transaction was initially launched as a US$900 million facility secured by two ultra-deepwater units.  However, due to strong interest from the Company's banking group, the facility was upsized to US$1.35 billion by including one additional ultra-deepwater unit in the collateral package.  The new loan will be priced at a margin of Libor plus 2% and was substantially oversubscribed, demonstrating the strength of Seadrill (SDRL)'s credit in the banking market.  This refinancing will provide Seadrill with US$350 million in additional cash.

By concluding this transaction the Company will be left with one ultra-deepwater and four jack-up units to be refinanced in 2015 and one ultra-deepwater and four jack-up units in 2016, totalling US$1.2 billion to be refinanced.

According to Seadrill, the Group it has gone to great lengths to diversify its sources of funding through opportunistic capital raises in the secured ECA, secured bank, unsecured bond, convertible bond, term loan B, and MLP markets.  Explaining that having access to numerous markets reduces refinancing risk and leads to decreased cost of capital that ultimately maximizes value creation for shareholders.



 
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