Nabors Industries Ltd. has announced that its wholly-owned subsidiary, Nabors Industries, Inc., has either redeemed or exchanged the full $146,000 aggregate outstanding principal amount of its Zero Coupon Senior Exchangeable Notes due 2023 and the full $699,854,000 outstanding aggregate principal amount of its Series B Zero Coupon Senior Exchangeable Notes due 2023.
NII has also notified the trustee to proceed with redemption of the remaining $82.8 million outstanding aggregate principal amount at maturity of its Zero Coupon Senior Convertible Debentures due 2021, CUSIP No. 629568AF3, that were not repurchased by NII in accordance with the holders' put option on the fifth anniversary of the 2021 Notes in February 2006.
For the 2023 Notes, holders representing an aggregate principal amount of $699,357,000, or 99.91% of the $700 million in 2023 Notes, exercised their right to exchange their 2023 Notes into the notional value of an amount of common stock of Nabors. Accordingly, such holders will be receiving, or have already received, cash representing the aggregate principal amount of their 2023 Notes plus a total of approximately 5.25 million shares of common stock of Nabors with a fair value of approximately $249.2 million, representing the premium in the notional exchange which NII elected to satisfy with common shares of Nabors in accordance with the applicable indenture.
The premium due was computed in accordance with the indentures utilizing the five or ten day volume weighted average price, as applicable, of common stock of Nabors beginning on the second trading day following receipt of the holder's exchange notice.
The aggregate value of this premium for both issues equates to an effective annual interest rate of 6.28% over the five-year term for the $700 million in principal amount of the 2023 Notes. To mitigate the dilutive impact of the share delivery to the Note holders, Nabors repurchased through an affiliate approximately 3.5 million shares of its common stock in the open market during May and early June 2008. The average price of these repurchases was approximately $41.68 per share.
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