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Ensco Prices Upsized $1B Offering of Senior Notes Due 2026

Zacks Equity Research

Ensco plc ESV has priced an upsized offering of $1 billion principal amount of 7.75% Senior Notes due 2026 at 100% on par.

Subject to customary closing conditions, the anticipated settlement date for the offering is Jan 26, 2018.

Per a previous announcement, Ensco is also executing offers to buy for cash about $985 million aggregate purchase price, excluding accrued interest. The purchase includes the outstanding 8.50% Senior Notes due 2019 issued by Pride International, Inc., a wholly owned subsidiary of Ensco; the outstanding 6.875% Senior Notes due 2020 issued by Pride; and the outstanding 4.70% Senior Notes due 2021 issued by Ensco.

The terms and conditions of the tender offers are described in an Offer to Purchase dated Jan 10, 2018. Ensco proposes to use the net proceeds from the notes offering to fund the purchase price, including applicable tender premium, payable relating to the repurchase notes in the tender offers as well as for general corporate purposes.

In a separate announcement, the company stated that it has raised the maximum aggregate purchase price in the earlier announced cash tender offers to purchase the outstanding notes of Ensco and its wholly-owned subsidiary — Pride International, Inc. — to $985 million excluding accrued interest.

Moreover, the company has increased the maximum aggregate purchase price, excluding accrued interest, of 6.875% Senior Notes due 2020 and 4.70% Senior Notes due 2021 to $728 million.

All other terms and conditions of the Tender Offers are unchanged as previously announced and described in the Offer to Purchase, dated Jan 10, 2018.

Price Performance

Ensco’s shares have gained 46.3% compared with the industry’s rally of 14.9% in the last three months.


Zacks Rank & Key Picks    

Ensco carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include Statoil ASA STO, Pioneer Natural Resources Company PXD, and Denbury Resources Inc DNR. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Statoil, based in Norway, is a major international integrated oil and gas company. It saw an average negative earnings surprise of 8.44% in the last four quarters.

Headquartered in Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 67.62% in the last four quarters.

Headquartered in Plano, TX, Denbury Resources, is engaged in the exploration, production and development of natural gas properties. The company delivered an average positive earnings surprise of 125.00% in the last four quarters.

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