Seadrill: $650 Million of Convertible Bonds
Bermuda-headquartered Seadrill Limited intends to issue up to $650 million in principal amount of convertible bonds with a seven-year tenor. This amount includes an increase option of up to US$100 million that has been granted to the joint bookrunners of the offering.
The senior, unsecured bonds will be convertible into common shares of the Company. The bonds are expected to have an annual coupon in the range of 2.875% – 3.375% payable semi-annually in arrear and a conversion premium of 30% – 35% over the volume weighted average price of the Company’s shares on the Oslo Stock Exchange (converted into US$) at
the time of pricing.
The convertible bonds will be issued and redeemed at 100% of their principal amount and will, unless previously redeemed, converted or purchased and cancelled, mature in October 2017. Holders of the bonds will be entitled to require an early redemption of the bonds on the fifth anniversary after the issue date, at the principal amount together with accrued interest. Seadrill will have the right to call the bonds after five years plus 21 days, if the value of the Seadrill shares underlying one bond on the Oslo Stock Exchange (translated into US$) exceeds, for a specified period of time, 150% of the principal amount of the bond.
The bonds are expected to be issued on or around October 27, 2010. Seadrill may decide to list the bonds on an exchange at a later stage.
