Nabors Announces Offering of Senior Guaranteed Notes

Rhea-AI Summary

Nabors Industries (NYSE: NBR) has announced that its subsidiary, Nabors Industries, Inc. (NII), is offering $550 million in senior guaranteed notes due 2031. These notes will be fully guaranteed by Nabors and its subsidiaries that guarantee the existing 7.50% senior notes due 2028. The new notes will rank equally with NII's existing senior obligations.

Nabors plans to use the proceeds, along with cash on hand, to redeem all of its 7.25% senior guaranteed notes due 2026. Any excess funds will be used for general corporate purposes, potentially including repayment of other outstanding debt. The notes will be offered to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act.

Positive

• Offering $550 million in new senior guaranteed notes due 2031
• Redeeming all 7.25% senior guaranteed notes due 2026
• Potential repayment of other outstanding indebtedness

Negative

• Increasing long-term debt obligations
• Notes not registered under Securities Act, limiting potential buyers

Insights

Financial Analyst

Nabors Industries Ltd. has announced an offering of $550 million in senior guaranteed notes due 2031. This move is part of a strategy to redeem its existing 7.25% senior guaranteed notes due 2026 and it indicates a proactive effort to manage its debt profile. By using the proceeds to refinance higher-cost debt with lower-cost debt, Nabors is aiming to reduce its interest expenses and extend the maturity profile of its liabilities.

From a financial perspective, the issuance of new notes comes with several implications. Firstly, the company is leveraging its creditworthiness to secure new funding, which reflects confidence in its future cash flows and operational stability. However, it's important to consider the cost of issuing new debt and how it compares to the current market rates. The reduction in interest expenses from refinancing should provide a short-term boost to cash flow, which could be a positive signal for investors.

Additionally, the new notes being offered at a senior unsecured status and guaranteed by Nabors and its subsidiaries add a layer of security for investors, making them more attractive. This could potentially lower the interest rate Nabors would need to offer, benefiting the company financially.

For retail investors, this step towards managing debt more efficiently is a sign of robust financial management. However, it's essential to keep an eye on the overall debt levels and market conditions which could affect the cost of borrowing and refinancing.

Market Research Analyst

The market's reception of Nabors Industries Ltd.'s new offering of senior guaranteed notes will hinge on several factors, including current investor sentiment, prevailing interest rates and the overall health of the oil and gas sector. Nabors, operating predominantly in the oilfield services industry, is subject to the cyclical nature of commodity prices, which can impact its revenue and profitability.

Investors will likely appraise this offering by considering the company's past performance, recent financial reports and forward-looking statements. The move to redeem 7.25% notes due 2026 using the proceeds from the 2031 notes indicates a strategic shift towards reducing interest burden and extending debt maturity, which is generally perceived as a sound financial maneuver. However, investors should also be cautious about the amount of leverage Nabors is taking on. While refinancing can improve short-term liquidity and reduce interest payments, it does not reduce the overall debt load.

In the context of the broader market, the success of this offering could signal investor confidence in Nabors' ability to navigate market volatility and maintain financial stability. For retail investors, the key takeaway is that Nabors is actively managing its debt, which could be seen as a positive move, provided the broader market conditions remain favorable.

HAMILTON, Bermuda, July 17, 2024 /PRNewswire/ -- Nabors Industries Ltd. (NYSE: NBR) ("Nabors") announced today that Nabors Industries, Inc. ("NII"), its indirect wholly-owned subsidiary, has commenced an offering of $550 million aggregate principal amount of senior guaranteed notes due 2031 (the "Notes"). The Notes will be fully and unconditionally guaranteed by Nabors and each of the subsidiaries, other than NII, that guarantee Nabors' 7.50% senior guaranteed notes due 2028.

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, including Nabors' 7.50% senior guaranteed notes due 2028. The guarantees of the Notes will be senior unsecured obligations of the guarantors and will rank pari passu in right of payment with all of the guarantors' existing and future senior obligations, including the guarantors' guarantee of the 7.50% senior guaranteed notes due 2028.

Nabors intends to use the net proceeds from this offering, along with cash on hand, to redeem all of its 7.25% senior guaranteed notes due 2026. Any excess proceeds will be used for general corporate purposes, including, potentially, repayment of other outstanding indebtedness.  

The Notes will be offered and sold to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in accordance with Regulation S under the Securities Act and applicable exemptions from registration, prospectus or like requirements under the laws and regulations of the relevant jurisdictions outside the United States. The Notes will not be registered under the Securities Act and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes will also not be registered in any jurisdiction outside of the United States and no action or steps will be taken to permit the offer of the Notes in any such jurisdiction where any registration or other action or steps would be required to permit an offer of the Notes.

The Notes will not be offered or sold in any such jurisdiction except pursuant to an exemption from, or in a transaction not subject to, the relevant requirements of laws and regulations of such jurisdictions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities of Nabors or its subsidiaries, nor shall there be any offer, solicitation or sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

The information above includes forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. Nabors does not undertake to update these forward-looking statements.

About Nabors Industries

Nabors Industries is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com. 

Media Contacts:

For further information regarding Nabors, please contact William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail william.conroy@nabors.com, or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email kara.peak@nabors.com. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail mark.andrews@nabors.com. 

View original content:https://www.prnewswire.com/news-releases/nabors-announces-offering-of-senior-guaranteed-notes-302199381.html

SOURCE Nabors Industries Ltd.

FAQ

What is the purpose of Nabors Industries 's (NBR) new $550 million notes offering?

Nabors (NBR) is offering $550 million in senior guaranteed notes due 2031 to redeem all of its 7.25% senior guaranteed notes due 2026 and potentially repay other outstanding indebtedness.

How will the new notes offered by Nabors Industries (NBR) be guaranteed?

The new notes will be fully and unconditionally guaranteed by Nabors and its subsidiaries that currently guarantee Nabors' 7.50% senior guaranteed notes due 2028.

Who are the target buyers for Nabors Industries 's (NBR) new notes offering?

The notes are being offered to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act.

Will Nabors Industries 's (NBR) new notes be registered under the Securities Act?

No, the new notes will not be registered under the Securities Act and can only be offered or sold pursuant to exemptions from registration requirements.