Nabors Industries Ltd. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on July 17, 2024, Nabors Industries, Inc. (“NII”) entered into a purchase agreement (the “Purchase Agreement”) under which NII agreed to sell $550 million aggregate principal amount of its 8.875% Senior Guaranteed Notes due 2031 (the “Notes”) to Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc and Morgan Stanley & Co. LLC (the “Initial Purchasers”). The Notes are fully and unconditionally guaranteed by Nabors Industries Ltd. (“NIL”) and the following of its indirect wholly-owned subsidiaries, including Nabors Drilling Holdings Inc., Nabors International Finance Inc., Nabors Lux Finance 1, Nabors Global Holdings Limited and Nabors Holdings Ltd. (collectively, the “Note Guarantors”). The closing of the sale of the Notes occurred on July 22, 2024. NII received net proceeds, after deducting offering commissions and other expenses payable by NII, of approximately $540.7 million. Nabors intends to use the net proceeds from this offering along with cash on hand, to fund NII’s redemption in full the $555.9 million in principal amount outstanding 7.25% Senior Guaranteed Notes due 2026.
NII sold the Notes to the Initial Purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Initial Purchasers then sold the Notes to (i) qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A and (ii) pursuant to Regulation S under the Securities Act. NII relied on these exemptions from registration based in part on representations made by the Initial Purchasers in the Purchase Agreement.
The Notes are governed by an indenture, dated as of July 22, 2024 (the “Indenture”), among NII, as issuer, the Note Guarantors, as guarantors, and Wilmington Trust, National Association, as trustee.
The Notes will bear interest at an annual rate of 8.875%. The Notes will mature on August 15, 2031.
The Indenture includes covenants customary for transactions of this type that, subject to significant exceptions, limit the ability of NIL and its subsidiaries to, among other things, incur certain liens or enter into sale and leaseback transactions. The Indenture also contains a limitation on certain of NIL’s subsidiaries’ ability to incur debt or guarantee debt of NIL, subject to significant exceptions. In the event of a Change of Control Triggering Event (as defined in the Indenture) with respect to the Notes, the holders of the Notes may require NII to purchase all or a portion of their Notes at a purchase price equal to 101% of the principal amount of the Notes so purchased, plus accrued and unpaid interest, if any.
Prior to August 15, 2027, NII may redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued and unpaid interest, if any. On or after August 15, 2027, NII may redeem the Notes, in whole or in part, at specified prices that decline over time, plus accrued and unpaid interest, if any. In addition, NII may use the net cash proceeds of one or more equity offerings to redeem up to 35% of the aggregate principal amount of Notes prior to August 15, 2027, at a price equal to 108.875% of the principal amount thereof plus accrued and unpaid interest, if any.
The Notes will be senior unsecured obligations of NII and will rank pari passu in right of payment with all of NII’s existing and future senior obligations. The guarantees of the Notes will be senior unsecured obligations of the Note Guarantors and will rank pari passu in right of payment with all of the Note Guarantors’ existing and future senior obligations. The Notes and the guarantees will have the same obligors as, and will therefore effectively rank pari passu with, NIL’s 7.25% Senior Guaranteed Notes due 2026 and 7.50% Senior Guaranteed Notes due 2028.
A copy of the Indenture is included in this Form 8-K as Exhibit 4.1 and incorporated herein by reference. The summary description of the Indenture in this report is qualified in its entirety by reference to Exhibit 4.1.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above regarding the issuance of the Notes is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
Description | |
| 4.1 | Indenture, dated as of July 22, 2024 by and among Nabors Industries, Inc., as issuer, the guarantors party thereto, and Wilmington Trust, National Association, as trustee. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| *Submitted electronically with this report in accordance with the provisions of Regulation S-T. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NABORS INDUSTRIES LTD. | ||
| Date: July 22, 2024 | By: | /s/ Mark D. Andrews |
| Name: Mark D. Andrews | ||
| Title: Corporate Secretary | ||