Seadrill Upsized its Convertible Bond Offering to U.S. $1 Billion

Seadrill has successfully completed its convertible bond offering, upsizing the offering size to U.S. $1 billion in principal amount of convertible bond due 2012.

The proceeds from the bonds will be partly used as alternative unsecured top-up financing for the existing 14 new buildings Seadrill has under construction. The major part of the bond proceeds is however expected to be used to secure future growth of the company's assets in addition to the existing new building commitments.

The senior unsecured convertible bonds will have an annual coupon of 3.625% payable semi-annually in arrear and a conversion price of U.S. $34.474 per bond representing a conversion premium of 45% of the volume weighted average price of the Company's shares on the Oslo Stock Exchange (converted into U.S. dollar) up to the pricing of the bonds on October 26, 2007 (the reference price).

The reference price of the company's common shares has been set at U.S. $23.7752 (based on a volume weighted average price of NOK 127.4944).

The Bonds will be issued and redeemed at 100% of their principal amount and will, unless previously redeemed, converted or purchased and canceled, mature in November 2012.

Seadrill has the right to call the bonds after three years plus 21 days, if the value of the Seadrill shares underlying one Bond on the Oslo Stock Exchange (translated into U.S. dollars) exceeds, for a specified period of time, 130% of the principal amount of the Bond.

The Bonds are expected to be settled on or around November 8, 2007. Seadrill may decide to list the Bonds on an exchange at a later stage.


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