Published on 3/27/2012 in the Prospect News High Yield Daily.
New Issue: Hercules Offshore prices $500 million of five-, seven-year notes
By Paul A. Harris
Portland, Ore., March 27 - Hercules Offshore, Inc. priced $500 million of high-yield notes in secured and unsecured tranches on Tuesday, according to an informed source.
The deal included a $300 million tranche of five-year senior secured notes (B1/B+/), which priced at par to yield 7 1/8%. The yield printed at the tight end of price talk, which was set in the 7¼% area.
In the unsecured tranche, Hercules Offshore priced a $200 million tranche of seven-year senior notes (Caa1/B-/) at par to yield 10¼%. The yield on the unsecured tranche printed 37.5 basis points beyond the wide end of price talk that was set in the 9¾% area.
Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and UBS Securities LLC were the bookrunners.
The Houston-based provider of offshore drilling equipment and services plans to use the proceeds to repay all outstanding debt under the existing secured term loan and for general corporate purposes, including to fund a portion of the acquisition of the drilling rig Ocean Columbia, as well as the costs associated with its repair, upgrade and mobilization.
Issuer: | Hercules Offshore, Inc.
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Amount: | $500 million
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Bookrunners: | Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., UBS Securities LLC
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Co-managers: | Capital One Southcoast, Inc., Comerica Securities, Inc., Natixis Securities Americas LLC, Pareto Securities AS
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Trade date: | March 27
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Settlement date: | April 3
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Distribution: | Rule 144A and Regulation S for life
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Marketing: | Roadshow
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Secured tranche
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Amount: | $300 million
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Maturity: | April 1, 2017
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Securities: | Senior secured notes
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Coupon: | 7 1/8%
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Price: | Par
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Yield: | 7 1/8%
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Call features: | Make-whole call until April 1, 2014, then callable at 105.344, 102.672, par on and after April 1, 2016
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Equity clawback: | 35% at 107.125 until April 1, 2014
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Change-of-control put: | 101%
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Ratings: | Moody's: B1
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| Standard & Poor's: B+
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Price talk: | 7¼% area
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Unsecured tranche
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Amount: | $200 million
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Maturity: | April 1, 2019
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Securities: | Senior unsecured notes
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Coupon: | 10¼%
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Price: | Par
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Yield: | 10¼%
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Call features: | Make-whole call until April 1, 2015, then callable at 107.688, 105.125, 102.563, par on and after April 1, 2018
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Equity clawback: | 35% at 110.25 until April 1, 2015
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Change-of-control put: | 101%
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Ratings: | Moody's: Caa1
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| Standard & Poor's: B-
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Price talk: | 9¾% area
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