PGS could raise more bonds to meet its $675m refinancing target, TradeWinds has learned.
The seismic survey shipowner said on Monday it has begun the process to raise $525m from a five-year first lien term loan and a further $150m in second-lien debt.
This second-lien debt could consist of either new bond debt or another term loan and is still being negotiated, a spokesman for PGS told TradeWinds on Tuesday.
"If we end up with a bond for the second lien it will be done based on New York documentation, similar to the senior notes of $212m we have outstanding, and marketed internationally," the spokesman said.
"We have pre-marketed these transactions to selected institutions and there is good interest among investors for both the first lien term loan and the second lien debt."
The bookrunners are Barclays, JPMorgan, DNB and Clarksons Platou, TradeWinds has learned.
PGS has already secured a 4.5-year commitment for a $250m extension to its current $350m revolving credit facility, which is conditional on completing the new term loan and second-lien debt transactions.
Proceeds from the refinancing will be used to redeem and repay PGS' 2020 senior notes in full, as well as to repay its existing term loan and its drawn revolving credit facility.
The company has said it will prioritise reducing its net debt to a target level of between $500m to a maximum of $600m.
However, if the proposed refinancing is finalised, PGS will have just over $600m in debt repayments due in 2024, excluding debt relating to capitalised leases, according to the pro forma debt maturity profile included in a presentation to investors on Monday.
PGS still aims to distribute dividends of 25-50% of its net income, but priority will be given to reducing its debt down to the target level before dividend payments are resumed, it said.
The shipowner's policy is to refinance its debt at least 12 to 18 months before maturity, according to the investor presentation.
PGS said on Monday it hopes to have finalised its refinancing by mid-June.
PGS is firm that raising new equity is not an option for its finance mix.
"We have been quite explicit in our communication to the capital market that equity is not something we consider to address the capital structure of PGS," the spokesman said.
