Seadrill Partners reaches agreement with majority term loan B lenders

By Wendy Van Sickle

Columbus, Ohio, July 20 – Seadrill Partners LLC reached an agreement with its term loan B lenders that removes the potential for an event of default related to non-payment of interest, according to a news release.

Seadrill Partners previously announced that it elected not to make an approximately $49 million interest payment due and payable on June 30 under the term loan B and to enter into a 30-day grace period expiring on July 30.

After concluding discussions with the term loan B lenders representing more than 70% of the amounts outstanding, Seadrill said the agreement that has been reached provides the company with the flexibility to address its 2020 debt maturities by paying down about $230 million in secured bank debt.

The vessels securing the bank debt will become part of the collateral securing the term loan B after closing the amendment.

The group of lenders that are party to the agreement have agreed to support the transaction and to provide a super senior loan in lieu of receipt of cash interest for the June 30 interest payment.

The option to participate will be offered to all term loan B lenders on a pro rata basis, but participation beyond that of the existing group is not required for closing.

Assuming 100% participation of term loan B lenders, a $69 million super senior loan maturing in February 2021 will be created carrying PIK interest of Libor plus 1,000 basis points and a 10% exit premium.

The consent solicitation period for additional term loan B lenders will expire at 5 p.m. ET on July 28.

The company is an Oslo-based provider of offshore drilling services to the oil and gas industry.

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