Ausdrill scraps US note offer

AUSDRILL will not proceed with a US$500 million note offering due to weakening market conditions.
Ausdrill scraps US note offer Ausdrill scraps US note offer Ausdrill scraps US note offer Ausdrill scraps US note offer Ausdrill scraps US note offer

Staff reporter

The company announced on May 2 the plan to issue the guaranteed senior unsecured notes.

But Ausdrill chief financial officer Peter Bryant said today that it was no longer attractive to proceed with the offer.

"When we announced we would be commencing a process to refinance our existing debt facilities earlier this month the market for US Notes was strong," he said.

"These conditions provided an opportune time for the company to consider refinancing its existing debt, including the Barminco senior secured notes that are not due until May 2022, through issuing new competitively priced, longer term US notes."

Bryant said the escalation in the US-China trade war and the drop in US equities had hampered its plans.

"While we are disappointed that the market has turned, we have stated many times that we will be disciplined around capital management and will not undertake transactions, including refinances, unless the economics are beneficial to the company," he said.

"The size and term of our existing debt facilities continues to provide both the capacity and flexibility to support the business as we deliver on our strategy for the new Ausdrill group."

As a result, the company will rescind the notice of redemption of its $350 million 6.625% senior secured notes due 2022.

The remainder of the offering was going to be applied to partial debt repayment.

Shares in Ausdrill rose 1.3% to A$1.50, valuing the company at just over $1 billion.

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