Testing the Waters – Preliminary Marketing of DOF Subsea Bond Issue

With joint managers, Arctic Securities, First Securities, Nordea and Pareto leading the process, DOF Subsea, which is indirectly owned by DOF ASA (51%) and energy focused private equity firm, First Reserve (49%), began marketing a senior unsecured bond issue consisting of floating and fixed rate tranches. Indicative terms for the offering assume a maximum amount of NOK 1,000 million with a minimum of NOK 650 million with a tenor of 3.5 years. Pricing on the FRN is proposed at 3-month NIBOR + 650 to 700 bps with the coupon on the fixed rate at 9.80% to 10.30%. Proceeds will be used to refinance the NOK 500 million outstanding under DOFSUB01 due March 2011 with the excess for general corporate purposes. The Guts of the Deal for this transaction also contained herein provides a closer look at the terms.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | October 7th, 2010 | Add a Comment

DOF Bond

Despite increasing default rates, corporate issuance of bonds in the primary market has been increasing in Norway and this activity has been extended to high yield, which now represents about 5% of total corporate issuance. For perspective, total issuance of corporates year to date amounts to NOK 19.2 billion compared to NOK 14.6 billion for the full year 2008.

This week Nordea Markets and Pareto Securities brought to market a 2-year senior secured floating rate note for DOF ASA, a leading offshore company, which operates 70 vessels. The notes bear interest at NIBOR + 9% and are secured by a first priority pledge in the shares of Norskan AS, DOF’s Brazilian subsidiary. Norskan owns 12 vessels all of which operate in Brazil with top-rated blue chip counterparties. The pledge provides strong collateral coverage as the outstanding amount under the issuance represents less than 50% of the NAV of the pledged assets. More details on the structure are contained here in the Guts of the Deal table.
Continue Reading