Each one in plain English, with the numbers worked through for a shareholder.
24 Sept 2020debt financing▼ BadMajor
On 2020-09-24 Nabors amended its 2018 credit agreement (Amendment No. 4). Lenders get a first-lien claim on certain US and Canadian drilling rigs, and the 5.5x debt-to-EBITDA test is replaced by a minimum liquidity requirement of $160.0M. The guarantor coverage ratio rises from 2.5x to 4.25x, the general debt basket falls to $90.0M, and up to $500M of subordinated-ranking unsecured notes is allowed. Maturity, commitments and interest are unchanged, and lenders who approved were paid a 0.25% fee. This changes the December 2019 covenant terms and puts rig security behind the bank debt.
On 2020-04-30 Nabors Delaware terminated its 2012 credit agreement, with nothing outstanding under it and no termination fees. The separate October 2018 credit agreement stays in place.
The January 2020 tender offers for Nabors Delaware's notes drew enough early responses that the company raised its total cap from $800M to about $955.6M. It accepted all tendered 5.50% 2023 notes ($407.7M), $379.7M of the 4.625% 2021 notes (about 89.5% of those tendered, prorated) and all tendered 5.10% 2023 notes ($165.5M), with payment expected 2020-01-22. No 5.00% 2020 notes were accepted, and late tenders will not be accepted. Holders of a majority of the 5.50% notes consented to strip most restrictive covenants from their indenture, effective once the notes are purchased. This resolves the open question on the January tender offers.
Nabors closed the sale of $600 million of 7.25% notes due 2026 and $400 million of 7.50% notes due 2028 on 2020-01-10, raising about $983.98 million net. It intends to use the money to fund tender offers of up to $800 million for its 5.50% 2023, 4.625% 2021, 5.10% 2023 and 5.00% 2020 notes, with the rest going to repay other debt and general purposes. This continues the refinancing of upcoming maturities, at higher interest rates than the notes being bought back.
On 2019-12-13 Nabors amended its October 2018 credit agreement: lender commitments fell to $981.6 million (US) and $32.0 million (Canada), and the net debt-to-capital covenant was replaced with a limit of 5.5 times EBITDA. The lien and debt baskets were each cut by $50 million, and Nabors gained the ability to repay up to $150 million of its notes due February 2025. Management said the changes give more room to absorb market shocks and refinance maturities through early 2023, while the lenders' commitments shrank. The release cites a net debt target of $2.9 billion at year-end.
On 2019-09-13 Nabors subsidiaries set up a $250 million facility to sell trade receivables, with Wells Fargo as administrative agent. The initial term is 23 months, and Nabors Industries Ltd. guarantees the subsidiaries' indemnification obligations, but not uncollectible receivables. This gives Nabors another funding source alongside its bank revolvers and bonds.
On 2018-10-11 Nabors closed a new unsecured revolving credit facility of $1.267 billion, maturing 2023-10-11, or 2022-07-19 if any of the 5.5% notes due January 2023 are still outstanding. At the same time it cut the existing revolver, due 2020-07-14, to $666.25 million. The new facility adds a debt-to-drilling-assets covenant and subsidiary guarantees, and limits dividends to $110 million a year. It replaces part of the older revolver with a longer-dated one.
Nabors Industries, Inc. gave notice that it will redeem $303,489,000 of its 9.25% senior notes due 2019 on 2018-07-06. After the redemption no notes of this series will remain outstanding. This pays off the 2019 notes early, which the filing describes as an option the company chose to exercise.
10 May 2018capital raising announcement● NeutralMajor
Nabors priced the offerings it launched on 2018-05-09: 35 million common shares at $7.75 each, and 5 million 6.00% mandatory convertible preferred shares at $50 each. Gross proceeds are expected to be $521.25 million, to repay revolver borrowings and for general corporate purposes. The preferred converts around 2021-05-01 into 5.3763 to 6.4516 common shares each, with cumulative dividends from 2018-08-01 if declared. Underwriters hold 30-day options for 5.25 million more common and 750,000 more preferred shares. Closing was expected around 2018-05-14. This resolves the open question on terms from the earlier launch, and the new shares dilute existing holders.
On 2018-05-09 Nabors launched public offerings of 35 million common shares and 5 million mandatory convertible preferred shares (each with a $50 liquidation preference, converting around 2021-05-01), plus overallotment options. Proceeds are meant to repay revolver borrowings and for general corporate purposes. New shares would dilute existing holders, and the dividend rate and conversion terms were not yet set.
The $800 million 5.75% senior notes due 2025 closed on 2018-01-23, with net proceeds of about $788.6 million. The money is intended to pay down the revolver first, then the revolver is to be drawn to repay the remaining 6.15% notes at their February 2018 maturity; Nabors must file to register an exchange offer for these notes by 2018-11-19. This completes the January pricing announcement.
On 2018-01-16 Nabors' US subsidiary priced $800 million of 5.75% senior notes due 2025, guaranteed by Nabors, with closing expected around 2018-01-23. Proceeds are intended to repay debt, including the 6.15% notes due February 2018, first paying down the revolver and commercial paper.
15 Dec 2017capital raising announcement● NeutralMajor
Nabors completed the Tesco acquisition on 2017-12-15, so Tesco is now an indirect wholly owned subsidiary and Tesco shares stopped trading on NASDAQ. About 32.0 million new Nabors shares are being issued (up slightly from the roughly 31.8 million expected in August), and Tesco options and RSUs were cashed out. This resolves the August 2017 agreement.
On 2017-08-13 Nabors agreed to buy Tesco Corporation in an all-stock deal: each Tesco share becomes 0.68 of a Nabors share, which would mean about 31.8 million new Nabors shares (diluting existing holders). Closing needs Tesco shareholder approval, an Alberta court order and regulatory approvals; Tesco would owe Nabors an $8 million fee if it terminates for a superior proposal.
Nabors' US subsidiary gave notice on 2017-05-04 that it will redeem $200 million of its 6.15% Senior Notes due 2018 on 2017-05-24, paying at least face value plus accrued interest (a make-whole formula applies). This pays down part of the older debt; the filing does not say how the redemption is funded.
13 Jan 2017capital raising announcement● NeutralMajor
The $500 million exchangeable notes closed on January 13, 2017, and the initial purchasers exercised their $75 million option in full on January 10 (so $575 million in total, an inference from the two figures). Net proceeds were about $561.2 million, to be used to prepay $162.5 million of the term loan and pay about $40.3 million for the capped calls, with the rest for general purposes. Additional capped calls were entered for the extra notes. This completes the offering announced on January 9; any shares issued on exchange would dilute holders, subject to the capped call offset.
11 Jan 2017capital raising announcement● NeutralMajor
On January 9, 2017 Nabors Industries, Inc. agreed to sell $500 million of 0.75% exchangeable senior notes due January 15, 2024, guaranteed by Nabors, with a 30-day option for $75 million more. The notes can be exchanged for cash, Nabors shares or a mix at the company's choice, at an initial price of about $25.16 per share (39.7488 shares per $1,000). Nabors also bought capped calls with a $31.4475 cap, which are expected to reduce potential dilution or offset cash payments on exchange. The announced plan is to use proceeds to prepay the remaining term loan and pay for the capped calls.
The $600 million 5.5% senior notes due January 15, 2023 closed on December 9, 2016, with net proceeds of about $587.3 million. Proceeds are intended to prepay the $162.5 million portion of the $325 million term loan and all revolver borrowings, with any remainder for general purposes. Nabors must file to register an exchange offer for the notes by October 5, 2017. This completes the offering announced December 2.
On December 2, 2016 Nabors Industries, Inc. agreed to sell $600 million of 5.50% senior notes due 2023, guaranteed by Nabors, to initial purchasers led by Morgan Stanley, with closing expected around December 9. The press releases say the proceeds are meant to prepay the $162.5 million portion of the September 2015 term loan due in 2018 and all amounts outstanding under the revolver, with any leftover going to general purposes such as repaying commercial paper or other debt.
On October 31, 2016 Nabors signed a shareholders agreement with Saudi Aramco to form a 50/50 joint venture in Saudi Arabia to own and operate onshore drilling rigs, expected to start commercial operations by the end of Q2 2017 with a 40-year initial term. Nabors will put in $20 million cash plus five rigs and related assets at start-up, and five more rigs in January 2019; the JV is also to buy 50 more rigs over 10 years from an Aramco rig-manufacturing JV, and Nabors must backstop its share of the first 25 rig purchases if the JV lacks cash or financing. Each side's initial investment through January 2019 is expected to approach US$500 million, mostly rigs, inventory and facilities rather than cash.
On September 29, 2015 Nabors Industries, Inc. (guaranteed by Nabors) signed a $325 million, five-year unsecured term loan with Bank of America, MUFG and Mizuho, with a mandatory $162.5 million prepayment due in three years. Interest is LIBOR plus 117.5 bps, set by Nabors' credit rating. This is a new borrowing on top of the revolver amended in July 2015; the filing does not state what the money is for.
On July 14, 2015 Nabors amended its November 2012 revolving credit agreement, raising borrowing capacity from $1.5 billion to $2.2 billion, extending maturity to July 14, 2020, and lowering the rate to LIBOR plus 125 bps with a 15 bps fee on undrawn amounts. The accordion option grew from $450 million to $500 million and up to two one-year extensions can be requested. Nabors says it expects to use it for strategic investments, debt refinancing and other corporate uses.
30 Mar 2015asset acquisition disposition● NeutralMajor
On March 24, 2015 Nabors completed the separation of its completion and production services business and the merger with C&J; the combined company is now C&J Energy Services Ltd. (NYSE: CJES, trading from March 25, 2015). Nabors received about $688 million in cash and owns about 53% of the combined company, with C&J's former public shareholders holding about 47%. Nabors expects to use the cash to prepay its $300 million term loan and for general corporate purposes. This resolves the pending C&J transaction and the March 31, 2015 deadline.
On February 6, 2015 Nabors amended the C&J deal terms, cutting the intercompany notes to be repaid at closing by $250 million, so Nabors would now receive about $688 million in cash (down from about $938 million) plus about 62.5 million Red Lion shares. It also took out a $300 million three-year unsecured term loan (margin 150 bps over LIBOR; Citibank administrative agent, guaranteed by Nabors), and amended the tax-opinion terms and a $65 million termination-fee condition tied to Nabors delivering financial information by March 3, 2015.
On December 19, 2014 Nabors gave C&J notice extending the deadline for completing the proposed C&J merger from December 31, 2014 to March 31, 2015. The filing says the Form S-4 had not yet been declared effective by the SEC, so the deal had not closed and the original timetable (before the end of 2014) was not met.
Nabors raised its quarterly dividend by 50%, from $0.04 to $0.06 per share, payable September 30, 2014 to holders of record on September 9, 2014. This continues the dividend started in 2013 and answers the open question of whether it would continue; the company said future dividends depend on board approval and business conditions.
On June 25, 2014 Nabors agreed to separate its U.S. and Canadian completion and production services businesses into its subsidiary Nabors Red Lion Limited and merge that subsidiary with C&J Energy Services. Nabors would receive about $938 million in cash and hold 50.25% of the fully diluted equity of the combined company (expected to be about 53% of outstanding shares), which would be renamed C&J Energy Services Ltd. and listed on the NYSE as CJES. Closing needs C&J shareholder approval, an effective Form S-4, antitrust clearance and other conditions, and is expected before the end of 2014 with no assurance; C&J owes Nabors a $65 million termination fee in several scenarios.
The $700 million note sale closed September 12, 2013 (net proceeds about $695.0 million), and NII bought back about $785.4 million of its 9.25% notes due 2019 for $992.1 million plus accrued interest, funded by the new notes, commercial paper borrowings and cash. This completes the refinancing launched on September 4; roughly $339.6 million of the 2019 notes appears to remain outstanding (inference from $1.125 billion less $785.4 million). NII and Nabors must file to register an exchange offer for the new notes by May 12, 2014.
