Vantage Drilling Announces Pricing of $1.65 Billion of Senior Secured Financing
Vantage Drilling Company (NYSE: VTG) announced today that its wholly-owned subsidiary, Offshore Group Investment Limited ("OGIL"), has priced an offering of $1.15 billion aggregate principal amount of 7.5% Senior Secured First Lien Notes due 2019 (the "Notes") and a Term Loan in the aggregate principal amount of $500 million (the "Term Loan") (collectively, the "Financings").
The Notes will be issued at par and will be guaranteed by Vantage and each of OGIL's existing and future subsidiaries and by certain of Vantage's other subsidiaries. The Notes and the related guarantees will be secured by all of OGIL's assets, including a first priority security interest in the Emerald Driller, the Sapphire Driller, the Topaz Driller, the Aquamarine Driller, the Platinum Explorer, the Titanium Explorer, and upon its delivery, the Tungsten Explorer, and by a pledge of the stock of OGIL and the guarantors (other than Vantage), in each case, subject to certain exceptions, permitted liens and the amended intercreditor agreement.
The Term Loan will be issued at 98% of the face value and will bear interest at LIBOR plus 5%, with a LIBOR floor of 1.25%. The Term Loan will have scheduled debt maturities, payable quarterly, of 5% in the first year and 10% in subsequent years with final maturity in 2017. The Term Loan will be secured by the same collateral securing the Notes.
The closing of the Financings is expected to occur on or about October 25, 2012, subject to customary closing conditions. In addition, the closing of the offering of the Notes and the Term Loan are conditioned on one another and the closing of the related Tender Offer and Consent Solicitation described below. The net proceeds from the Financings, if completed, are expected to be used by OGIL (i) to pay the total consideration and accrued and unpaid interest on a concurrent tender offer of up to $1,000,001,000 of OGIL's existing 11 1/2% Senior Secured Notes due 2015 and related consent solicitation (the "Tender Offer and Consent Solicitation"), (ii) for general corporate purposes, including to fund the final construction payment for the Tungsten Explorer drillship pursuant to the construction contract with Daewoo Shipbuilding and Marine Engineering Co., Ltd., and (iii) to pay fees and expenses related to the Financings, the Tender Offer and Consent Solicitation and related transactions.
The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act. The Notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S of the Securities Act. Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption under the Securities Act and applicable state securities laws.
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