Teekay Offshore Partners is closing in on a Friday pricing for its mammoth $500m high-yield bond issue in the US.
Price talk on the fundraiser has been in the range of 8% to 8.5% for the unsecured 5-year notes, according to sources familiar with the deal.
Most of the proceeds are earmarked to redeeming some $440m in bonds due in 2019, including a 6% US issuance and about $125m in Norwegian kroner-denominated notes.
Teekay Offshore is winding down a roadshow that has included presentations to both US and European investors as it tries to conclude one of the biggest bond issues seen in shipping/offshore in recent years.
By moving early, Teekay Offshore has options should it either finding pricing unattractive or not be able to pull together the targeted amount of the deal, the sources said.
Citigroup Global Markets is leading the offering.
Teekay Offshore also has initiated a tender process contingent on a successful result to the bond issue.
Existing bondholders have until 10 July 2018 to accept the bond buy-back offer. However, those tendering their bonds by 2 July 2018 will receive a higher payout.
Bondholders meeting the earlier tender deadline will receive $1,025 for each $1,000 principal amount of bonds accepted for repayment, while those meeting the latter deadline will receive only $955.
Teekay Offshore Partners provides marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the oil industry.
It has approximately $5.6bn in assets and 63 offshore assets, including FPSO units, shuttle tankers and FSO units, as well as conventional tankers.
