Schlumberger, Smith Offer to Repurchase up to $1.87B in Debt

(Dow Jones Newswires), Sep. 22, 2010

Schlumberger and its Smith International unit began tender offers to repurchase up to a combined $1.87 billion in debt.

The oil-services giant completed its $11 billion acquisition of Smith last month, expanding the services it can offer to clients.

Schlumberger didn't say how it will fund the tender offers, but a host of companies in recent weeks have been selling fresh debt to fund such buybacks, looking to take advantage of low interest rates. A spokesman wasn't immediately available to comment.

Smith is offering to repurchase the $220 million of 6.75% senior notes due next year at face value and up to $1 billion of a combined $1.28 billion of four other note series maturing later in the decade. Those offers are up to 42% above face value, including early tender premiums.

Meanwhile, Schlumberger's technology unit is offering to repurchase its $649.2 million of 6.5% senior notes due 2012 at face value.

Schlumberger in July reported second-quarter earnings jumped 33%, driven by high drilling activity in the onshore U.S. as oil demand recovered from last year's weakness. Its shares closed Tuesday at $59.29 and were inactive premarket.

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