Oil States Announces Pricing of $135 Million Principal Amount of Convertible Senior Notes Due 2026
March 16 2021 - 10:30PM
Oil States International, Inc. (NYSE:OIS) (the “Company”) announced
that it has priced a private offering of $135 million principal
amount of its 4.75% convertible senior notes due 2026 (the
“Notes”). The Company also granted the initial purchasers the
option to purchase, during a 13-day period beginning on, and
including, the first date on which the Notes are issued, up to an
additional $15 million aggregate principal amount of the Notes. The
Notes were only offered to persons reasonably believed to be
qualified institutional buyers (as defined in the Securities Act of
1933, as amended (the “Securities Act”)), pursuant to Rule 144A
under the Securities Act. The closing of the transaction is subject
to customary closing conditions, and the Notes are expected to be
delivered and paid for on March 19, 2021.
The Notes will be senior, unsecured obligations of the Company.
The Notes, which priced at par, will bear interest at a rate of
4.75% per year, payable semiannually in arrears on April 1 and
October 1 of each year, beginning on October 1, 2021. The Notes
will mature on April 1, 2026, unless repurchased, redeemed or
converted in accordance with their terms prior to such date. The
Company will have the option to redeem all or any portion of the
Notes on or after April 6, 2024, if certain conditions (including
that the Company’s common stock trades above 130% of the conversion
price for a specified period) are met, at a redemption price equal
to 100% of the principal amount plus accrued and unpaid interest
to, but excluding, the redemption date.
The Notes will be convertible based on an initial conversion
rate of 95.3516 shares of the Company’s common stock per $1,000
principal amount of the Notes, which is equivalent to an initial
conversion price of approximately $10.49 per share, which
represents a conversion premium of approximately 25% to the last
reported sale price of $8.39 per share of the Company’s common
stock on the New York Stock Exchange on March 16, 2021. The
conversion rate is subject to adjustment in certain circumstances.
In addition, following certain corporate events that could occur
prior to the maturity date for the Notes or upon a notice of
redemption, the Company will, in certain circumstances, increase
the conversion rate for a holder that elects to convert its Notes
in connection with such corporate event or notice of
redemption.
The Notes will be convertible into, subject to various
conditions, cash, shares of the Company’s common stock, or a
combination thereof, at the Company’s election.
The Company estimates that the net proceeds from the offering of
the Notes will be approximately $130 million (or approximately $145
million if the initial purchasers exercise in full their option to
purchase additional Notes), in each case, after deducting the
initial purchasers’ discounts and commissions and the Company’s
estimated offering expenses. The Company intends to use $120
million of the net proceeds from this offering to repurchase for
cash $125 million aggregate principal amount of its 1.50%
convertible senior notes due 2023 (the “2023 Convertible Notes”) as
described below. The Company intends to use any remaining net
proceeds for general corporate purposes, which may include further
repurchases of its 2023 Convertible Notes and/or repayment of
borrowings outstanding under our asset-based revolving credit
facility.
Contemporaneously with the pricing of the Notes in the offering,
the Company entered into separate and individually negotiated
transactions (the “concurrent note repurchases”) with certain
holders of the 2023 Convertible Notes to repurchase $125 million
aggregate principal amount of the 2023 Convertible Notes for an
aggregate of $120 million in cash, plus accrued interest.
The Company expects that certain holders of any 2023 Convertible
Notes that the Company agreed to repurchase that have hedged their
equity price risk with respect to such 2023 Convertible Notes (the
“hedged holders”) will, concurrently with the pricing of the Notes,
unwind all or part of their hedge positions by buying the Company’s
common stock and/or entering into or unwinding various derivative
transactions with respect to the Company’s common stock. The amount
of the Company’s common stock to be purchased by the hedged holders
may be substantial in relation to the historical average daily
trading volume of the Company’s common stock. Any repurchase of the
2023 Convertible Notes and the potential related market activities
by holders of the 2023 Convertible Notes participating in the
concurrent note repurchases could increase (or reduce the size of
any decrease in) the market price of the Company’s common stock and
may have increased the initial conversion price of the Notes. The
Company cannot predict the magnitude of such market activity or the
overall effect it will have on the price of the Notes or the
Company’s common stock.
The offer and sale of the Notes were not, and the offer and sale
of any shares of the Company’s common stock issuable upon
conversion of the Notes are not expected to be, registered under
the Securities Act or the securities laws of any other
jurisdiction, and the Notes and any such shares may not be offered
or sold in the United States absent registration or an applicable
exemption from such registration requirements.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor shall it
constitute an offer, solicitation or sale in any jurisdiction in
which such offer, solicitation or sale is unlawful. Any offer, if
at all, will be made only pursuant to Rule 144A under the
Securities Act.
Forward Looking Statements
The foregoing contains forward-looking statements within the
meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are those that do not state historical
facts and are, therefore, inherently subject to risks and
uncertainties. The forward-looking statements included herein are
based on current expectations and entail various risks and
uncertainties that could cause actual results to differ materially
from those forward-looking statements. Such risks and uncertainties
include, among other things, the Company’s ability to consummate
the offering, the Company’s ability to effectuate the concurrent
note repurchases or future note repurchases of the 2023 Convertible
Notes, the other risks associated with the general nature of the
energy service industry and other factors discussed in the
“Business” and “Risk Factors” sections of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2020 and the
subsequently filed Periodic Reports on Form 8-K. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof, and, except as
required by law, the Company undertakes no obligation to update
those statements or to publicly announce the results of any
revisions to any of those statements to reflect future events or
developments.
SOURCE: Oil States International, Inc.
Contact:
713-652-0582
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