Rubicon to Issue $260M in HY for Rig Buy
February 22, 2010
Rubicon Drilling Services plans to issue $260 million in junk bonds to help finance the purchase of an oil drilling rig, according to several reports. The issue is expected to price Wednesday.
Price talk on the $260 million senior secured second-lien notes due 2017 indicates a total yield of about 12.5% after an original issue discount. Jefferies is the lead bookrunner.
The company is issuing the notes through subsidiary RDS Ultra-Deepwater, which will lend the proceeds to Rubicon. Rubicon will use the proceeds to finance its purchase of a large deep water oil drilling rig, which it plans to lease to a Mexican oil company, Petroleos Mexicanos.
Moody’s Investors Service rated the proposed notes B3, and Standard & Poor’s assigned a B- rating.
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