29 Oct, 2021

Petrofac completes upsized $600M, 5-year bond; terms

Petrofac Ltd. has completed its $600 million offering of five-year (non-call two) secured bonds, which priced at the tight end of guidance with a 9.75% coupon to yield 10%. Goldman Sachs (B&D) and J.P. Morgan were joint global coordinators.

The deal was guided as a $500 million transaction with initial price thoughts at 10.25%-10.50%, which was brought down to 10-10.25% this afternoon.

Proceeds, along with a concurrent equity raise, will be used to refinance indebtedness and pay for the final £77 million penalty related to charges brought by the U.K.'s Serious Fraud Office for seven counts of failure to prevent bribery between 2011 and 2017. The Serious Fraud Office payment will be payable in the first quarter of 2022.

Ratings are BB-/BB- at S&P Global Ratings and Fitch. First Abu Dhabi Bank and NatWest Markets were joint bookrunners on the transaction.

Listed in London, Petrofac providers oil field services to the international oil and gas industry, with operations centered across the U.K., the Middle East and India.

Terms:

Issuer Petrofac Ltd.
Ratings BB-/BB- (S&P Global Ratings/Fitch)
Amount $600 million
Issue Secured notes (144A/Reg S for life)
Coupon 9.75%
Price 99.028
Yield 10%
Spread T+879
Maturity Nov. 15, 2026
Call Non-call two (first call at 104.875% on Nov. 15, 2023; then 102.4375% on Nov. 15, 2024; then par on Nov. 15, 2025, and thereafter)
Trade (date) Oct. 29 2021
Settle Nov. 9, 2021
Joint global coordinators GS (B&D), JPM
Joint bookrunners First Abu Dhabi Bank, NatWest Markets
Price talk 10-10.25%, IPTs 10.25%-10.50%
Notes Upsized from $500 million; make-whole at T+50 prior to Nov. 15, 2023; up-to-40% equity claw at 109.75% prior to Nov. 15, 2023; change of control put at 101%