Precision Drilling Corporation Announces Pricing of Private Offering of US$400,000,000 of Senior Notes Due 2029

Rhea-AI Summary

Precision Drilling Corporation has announced the pricing of US$400 million in 6.875% Senior Notes due 2029, offered at 99.253% of face value. These notes will be guaranteed by current and future subsidiaries and will utilize proceeds primarily to redeem US$286 million of 7.750% Senior Notes due 2023 and US$263 million of 5.250% Senior Notes due 2024. The offering is exempt from registration under U.S. securities laws.

Positive

• Proceeds from the offering will be used to redeem higher-interest debt, potentially reducing interest expenses.
• The offering strengthens the balance sheet by refinancing existing debt instruments.

Negative

• The private placement may dilute shareholder value if the market reacts negatively to increased debt load.
• The issuance of new notes exposes the company to interest rate risk in the future.

CALGARY, Alberta, June 02, 2021 (GLOBE NEWSWIRE) -- Precision Drilling Corporation (“Precision” or the “Company”) announced today that it has priced US$400,000,000 aggregate principal amount of its 6.875% Senior Notes due 2029 (the “Notes”), issued at a price equal to 99.253% of the face value, in a private offering that is exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be guaranteed on a senior unsecured basis by current and future U.S. and Canadian subsidiaries that also guarantee Precision’s revolving credit facility and certain other future indebtedness. Precision plans to use the net proceeds from the offering, together with unutilized capacity under its revolving credit facility, to: (i) redeem in full US$286 million aggregate principal amount of its 7.750% Senior Notes due 2023 (“2023 Notes”); and (ii) redeem in full US$263 million aggregate principal amount of its 5.250% Senior Notes due 2024 (“2024 Notes”), with conditional redemption notices for such redemptions issued yesterday.

The Notes and the related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, any securities, nor shall there be any sales of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release is neither an offer to purchase nor a solicitation of an offer to sell any of the 2023 Notes or the 2024 Notes and this news release shall not constitute a notice of redemption in respect thereof.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this news release relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”). Forward-looking information and statements in this news release include, but are not limited to, the proposed offering of Notes and the use of the net proceeds from the offering. Forward-looking information and statements are based on certain expectations and assumptions made by Precision, including the assumption that the offering will be completed as proposed. Although Precision believes that the expectations and assumptions on which such forward-looking information and statements are based are reasonable, undue reliance should not be placed on the forward-looking information and statements as Precision cannot give any assurance that they will prove to be correct. Actual results could differ materially from those currently anticipated due to a number of factors and risks, which include, but are not limited to, the risk that the offering of Notes will not be completed as proposed or at all and general economic, market and business conditions. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other risks factors that could affect Precision’s operations, financial results and the completion of the offering are discussed in Precision’s annual information form and other disclosure documents on file with the Canadian securities commissions on SEDAR (www.sedar.com) and with the U.S. Securities and Exchange Commission on EDGAR (www.sec.gov).

The forward-looking information and statements contained in this news release are made as of the date hereof and Precision does not undertake any obligation to update publicly or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

About Precision
Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as “Alpha” that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Additionally, Precision offers well service rigs, camps and rental equipment and directional drilling services all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS.”

For further information, please contact:

Carey Ford, Senior Vice President & Chief Financial Officer
713.435.6100

800, 525 - 8th Avenue S.W. Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

FAQ

What is the purpose of Precision Drilling's US$400 million Senior Notes offering?

The offering aims to refinance existing higher-interest debt, specifically redeeming US$286 million of 7.750% Senior Notes due 2023 and US$263 million of 5.250% Senior Notes due 2024.

What are the terms of the Senior Notes issued by Precision Drilling?

The Senior Notes have a principal amount of US$400 million, an interest rate of 6.875%, and are due in 2029.

How will Precision Drilling's senior notes impact existing shareholders?

The refinancing may benefit shareholders by reducing the company's interest expenses, but it also introduces potential risks related to increased debt levels.

When was the Senior Notes offering by Precision Drilling announced?

The offering was announced on June 2, 2021.