Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on January 7, 2020, Nabors Industries Ltd. ("NIL") and
certain of its indirect wholly-owned subsidiaries, Nabors Industries, Inc.
("NII"), Nabors Drilling Holdings Inc., Nabors International Finance Inc.
("Nabors Finance"), Nabors Lux Finance 1, Nabors Global Holdings Limited and
Nabors Holdings Ltd. (collectively, the "Note Guarantors") entered into a
purchase agreement (the "Purchase Agreement") under which NIL agreed to sell
$600 million aggregate principal amount of its 7.25% Senior Guaranteed Notes due
2026 (the "2026 Notes") and $400 million aggregate principal amount of its 7.50%
Senior Guaranteed Notes due 2028 (the "2028 Notes" and, together with the 2026
Notes, the "Notes") to Citigroup Global Markets Inc., Morgan Stanley & Co. LLC,
Wells Fargo Securities, LLC, Mizuho Securities USA LLC, Goldman Sachs & Co. LLC,
BofA Securities, Inc., MUFG Securities Americas Inc., HSBC Securities (USA)
Inc., SMBC Nikko Securities Americas, Inc., Academy Securities, Inc., Intrepid
Partners, LLC and Siebert Williams Shank & Co., LLC (the "Initial Purchasers").
The Notes are fully and unconditionally guaranteed by the Note Guarantors. The
closing of the sale of the Notes occurred on January 10, 2020. NIL received net
proceeds, after deducting estimated offering commissions and estimated net
expenses, of approximately $983.98 million. Nabors intends to use the net
proceeds from this offering to fund NII's offer to repurchase, for an aggregate
purchase price of up to $800 million of NII's 5.50% senior notes due 2023,
4.625% senior notes due 2021, 5.10% senior notes due 2023 and 5.00% senior notes
due 2020 in the tender offers and consent solicitations, as applicable, for such
notes announced on January 6, 2020, subject to the terms, priorities and caps
set forth in the Offer to Purchase and Consent Solicitation Statement dated
January 6, 2020, and will use the remaining proceeds for the repayment of other
debt and other general corporate purposes.
NIL sold the Notes to the Initial Purchasers in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Securities Act"). The Initial Purchasers then sold the Notes to
(i) qualified institutional buyers pursuant to the exemption from registration
provided by Rule 144A and (ii) pursuant to Regulation S under the Securities
Act. NII relied on these exemptions from registration based in part on
representations made by the Initial Purchasers in the Purchase Agreement.
The Notes are governed by an indenture, dated as of January 10, 2020 (the
"Indenture"), among NIL, as issuer, the Note Guarantors, as guarantors, and
Wilmington Trust, National Association, as trustee. In connection with entering
into the Indenture, the Note Guarantors (other than Nabors Finance) entered into
a joinder agreement to become guarantors under NII's $1.1036 billion senior
unsecured revolving credit facility dated October 11, 2018, as amended.
The 2026 Notes will bear interest at an annual rate of 7.25% and the 2028 Notes
will bear interest at an annual rate of 7.50%. The 2026 Notes will mature on
January 15, 2026 and the 2028 Notes will mature on January 15, 2028.
The Indenture includes covenants customary for transactions of this type that,
subject to significant exceptions, limit the ability of NIL and its subsidiaries
to, among other things, incur certain liens or enter into sale and leaseback
transactions. The Indenture also contains a limitation on NIL's ability to incur
debt or guarantee debt of NIL, subject to significant exceptions. In the event
of a Change of Control Triggering Event (as defined in the Indenture) with
respect to the Notes, the holders of the Notes may require NII to purchase all
or a portion of their Notes at a purchase price equal to 101% of the principal
amount of the Notes so purchased, plus accrued and unpaid interest, if any.
Prior to July 15, 2022, NIL may redeem the 2026 Notes, in whole or in part, at a
price equal to 100% of the principal amount thereof plus a "make-whole" premium
and accrued and unpaid interest, if any. On or after July 15, 2022, NIL may
redeem the 2026 Notes, in whole or in part, at specified prices that decline
over time, plus accrued and unpaid interest, if any. In addition, NIL may use
the net cash proceeds of one or more equity offerings to redeem up to 35% of the
aggregate principal amount of 2026 Notes prior to July 15, 2022, at a price
equal to 107.25% of the principal amount thereof plus accrued and unpaid
interest, if any.
Prior to January 15, 2023, NIL may redeem the 2028 Notes, in whole or in part,
at a price equal to 100% of the principal amount thereof plus a "make-whole"
premium and accrued and unpaid interest, if any. On or after January 15, 2023,
NIL may redeem the 2028 Notes, in whole or in part, at specified prices that
decline over time, plus accrued and unpaid interest, if any. In addition, NIL
may use the net cash proceeds of one or more equity offerings to redeem up to
35% of the aggregate principal amount of 2028 Notes prior to January 15, 2023,
at a price equal to 107.50% of the principal amount thereof plus accrued and
unpaid interest, if any.
The Notes will be senior unsecured obligations of NIL and will rank pari passu
in right of payment with all of NIL's existing and future senior obligations.
The guarantees of the Notes will be senior unsecured obligations of the Note
Guarantors and will rank pari passu in right of payment with all of the Note
Guarantors' existing and future senior obligations.
A copy of the Indenture is included in this Form 8-K as Exhibit 4.1 and
incorporated herein by reference. The summary description of the Indenture in
this report is qualified in its entirety by reference to Exhibit 4.1.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above regarding the issuance of the Notes
is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
4.1 Indenture, dated as of January 10, 2020 by and among Nabors Industries
Ltd., as Issuer, Nabors Industries, Inc., as Guarantor, Nabors
International Finance Inc., as Guarantor, Nabors Lux Finance 1, as
Guarantor, Nabors Global Holdings Limited, as Guarantor, Nabors Drilling
Holdings Inc., as Guarantor, Nabors Holdings Ltd., as Guarantor, and
Wells Fargo Bank, N.A., as trustee, including as exhibits thereto the
form of Notes.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
*Submitted electronically with this report in accordance with the
provisions of Regulation S-T.
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