Pacific Drilling Closes Three Transactions Totaling $2 Bln

Pacific Drilling S.A. announced today the closing of three financing transactions totaling $2 billion. The transactions included an offering of $750 million in 5.375% senior secured notes due 2020, a $750 million senior secured term loan with 2018 maturity, and a $500 million senior secured revolving credit facility also maturing in 2018.

Net proceeds from the offering of the senior secured notes and the term loan were used to fully repay all $1.35 billion outstanding on our Project Facilities Agreement. The balance of the net proceeds together with approximately $150 million in releases of restricted cash from the Project Facilities Agreement will be used for general corporate purposes, primarily the initial construction payments for the Pacific Zonda. These transactions are in addition to the company’s $1 billion Senior Secured Credit Facility, signed in the first quarter of 2013 and intended to fund the construction of the Pacific Sharav and the Pacific Meltem.

The $500 million revolving credit facility can provide up to $200 million in future incremental funding intended to support our working capital needs as the company continues to expand. The balance of $300 million is available for letters of credit that backstop its customs bonds for the temporary importation of its drillships into their operating location, including already existing customs bonds totaling $204 million for the Pacific Bora and the Pacific Scirocco.

CEO Chris Beckett commented, “The successful execution of these financial transactions marks an important milestone in our company’s development. The new financings considerably strengthen our capital structure and provide us with increased financial flexibility, in addition to providing incremental liquidity to address pre-delivery payments for the Pacific Zonda’s construction. On closing of the transactions, we have released restricted cash balances and removed restrictions on the internal movement of our cash, we have added a revolving credit facility providing $200 million in additional liquidity, we have cut our annual debt amortization payments by over $200 million, we have extended and laddered our debt maturity profile and we have locked in attractive interest rates. In addition to our proven expertise in arranging complex bank financing with export credit agency participation, we have now expanded our access to the capital markets and further diversified our sources of capital. Following these latest transactions we still expect to require additional external funding for the final delivery payment on the Pacific Zonda, scheduled for the first half of 2015.”

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Press Release, June 4, 2013