Seadrill Partners closes loan deal

Seadrill Partners LLC announced today that it has closed the proposed US$1.1 billion add-on senior secured term loan B announced on June 5. The add-on term loan was upsized from US$1 billion and priced at the existing rate of Libor plus 3%.

Seadrill Partners closes loan deal

The loan will be borrowed by two of the Company’s subsidiaries, as borrowers, guaranteed by certain of the Company’s existing and future subsidiaries, and secured by six of the Company’s ultra-deepwater drilling rigs and certain other assets on substantially the same terms as the Company’s existing US$1.8 billion term loan incurred in February 2014.

Proceeds of the term loan are to be used to refinance certain existing indebtedness, pay transaction expenses, and for general company purposes.

In conjunction with the formation of Seadrill Partners in 2012 and subsequent dropdown of the West Auriga, back-to-back and intercompany loans were used to finance the debt portion of the transactions.

As well as being overly reliant on Seadrill Limited, this structure had an aggressive amortization profile that was not optimal for Seadrill Partners, the company says.

This add-on term loan is a continuation of the financing strategy put in place in February with a 1% amortization profile that further enhances the Company’s ability to efficiently manage its replacement capital expenditure reserves by investing in new assets. The Company continues to be rated BB- / Ba3 following this transaction.

Graham Robjohns, CEO of Seadrill Partners, says in a comment: “We are pleased to have completed another important step in improving Seadrill Partners’ financial structure and positioning the Company for future growth. The addition of another two units to the Borrower Group has increased contract duration and further diversifies the cash flows supporting the Company’s credit. By upsizing the loan, the market has acknowledged Seadrill Partners’ long term contracted cash flow, visible growth profile and high quality fleet. The Company’s ability to obtain financing at attractive margins in a challenging dayrate environment demonstrates Seadrill Partners’ financial flexibility and unique characteristics.”

Deutsche Bank Securities Inc., is acting as Sole Global Coordinator. Deutsche Bank Securities Inc., Barclays Bank PLC and Goldman Sachs Bank USA are joint lead arrangers and joint bookrunners. ABN AMRO Capital USA LLC, BNP Paribas, Crédit Agricole Corporate and Investment Bank and ING Bank NV are acting as Co-Managers.

Press Release, June 27, 2014


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