Norway’s PGS completes refinancing; eligible for ratings upgrade

Chicago, March 17 – PGS ASA (Petroleum Geo Services) completed an anticipated refinancing as it priced $450 million of new 13½% senior secured bonds with a four-year tenor on Friday, according to a press release.

With cash from the company’s balance sheet, the proceeds of the bonds will be used to repay $600 million of the company’s term loan B due in March 2024 at par.

After the $600 million repayment, the term loan B will have $138 million outstanding. The company expects to repay that amount at par from cash flow and liquidity sources.

PGS still has a $50 million super senior loan maturing in March 2024. That loan may either be extended one year at the company’s option or replaced with a revolver of up to $75 million.

In terms of other debt, PGS made a repayment in early February of $83 million on its export credit financing loans. The remaining balance on the export credit financing is around $140 million.

The total interest costs of the company will be reduced, in spite of the 13½% coupon on the new bonds, as PGS is now carrying less debt.

The refinancing makes the company eligible for a ratings upgrade (Caa1/CCC+) from both Moody’s Investors Service and S&P Global Ratings, as earlier announced by both agencies.

If the ratings are upgraded, and with the lower leverage, PGS’ interest rate will be 100 basis points lower on the remaining balance on the term loan B.

“The company remains committed to continue reducing its debt and thereby further reduce interest cost,” PGS said in the press release.

PGS is a Lilleakerveien, Norway-based marine geophysical company that provides a broad range of seismic and reservoir services, including data acquisition, imaging, interpretation and field evaluation.

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