Item 1.01. Entry into a Material Definitive Agreement
On August 15, 2017, Diamond Offshore Drilling, Inc. (the Company) completed an underwritten public offering of
$500 million aggregate principal amount of the Companys 7.875% Senior Notes due 2025 (the Notes) registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to the Companys shelf
registration statement on Form
S-3
(Registration
No. 333-202618)
(the Registration Statement) filed with the Securities and Exchange Commission (the
SEC) on March 9, 2015. The prospectus forming a part of the Registration Statement was supplemented by the Companys prospectus supplement dated August 1, 2017, which the Company previously filed with the SEC.
The Notes were issued pursuant to an Indenture (the Base Indenture), dated as of February 4, 1997, between the Company and
The Bank of New York Mellon Trust Company, N.A. (successor to The Bank of New York Mellon which was previously known as The Bank of New York) (as successor under the Base Indenture to The Chase Manhattan Bank), as trustee (the Trustee),
as supplemented and amended by the Ninth Supplemental Indenture, dated as of August 15, 2017 (the Supplemental Indenture and together with the Base Indenture, the Indenture), between the Company and the Trustee. The Base
Indenture and the Supplemental Indenture (including the form of Global Security for the Notes) set forth the specific terms applicable to the Notes and are filed as Exhibits 4.1 and 4.2, respectively, to this report and incorporated herein by
reference. The descriptions of the Indenture and the Notes in this report are summaries and do not purport to be complete, and are qualified in their entirety by reference to the full text of the Indenture and the form of Global Security
representing the Notes.
The Notes are the Companys general unsecured obligations and rank equally in right of payment with all of
the Companys other existing and future senior indebtedness. The Company is a holding company and, in addition to being effectively subordinated to secured obligations, the Notes are structurally subordinated to all existing and future
obligations of the Companys subsidiaries. The Notes constitute a new series of debt securities under the Indenture.
Interest on the
Notes will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018, to holders of record on the preceding February 1 and August 1, respectively. Interest on the Notes
will be computed on the basis of a
360-day
year consisting of twelve
30-day
months. The Notes will mature on August 15, 2025. The Company may redeem the Notes, in
whole or in part, at its option at any time on at least 15 days but not more than 60 days prior written notice at the applicable redemption prices set forth in the Indenture. In addition, upon the occurrence of a Change of Control Repurchase Event
(as defined in the Indenture) with respect to the Notes, unless the Company has previously or concurrently exercised its right to redeem all of the Notes, each holder of Notes will have the right, subject to certain exceptions and on the terms and
subject to the conditions set forth in the Indenture, to require that the Company repurchase all or any part of that holders Notes for a cash price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued
and unpaid interest, if any, thereon to, but not including, the date of repurchase.
The Indenture contains certain customary covenants,
including limitations on the ability of the Company and its subsidiaries, with certain exceptions, to incur debt secured by certain liens and to engage in certain sale and lease-back transactions.
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Holders of the Notes may not enforce the Indenture or the Notes except as provided therein. Each
of the following is an event of default, as defined in the Indenture, with respect to the Notes:
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default for 30 days in payment of any interest on the Notes;
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default in payment of principal of the Notes at maturity or the redemption price when the same becomes due and payable;
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default in the payment (after any applicable grace period) of any indebtedness for money borrowed by the Company or a subsidiary of the Company in excess of $100.0 million principal amount (excluding such
indebtedness of any subsidiary of the Company other than a Significant Subsidiary (as defined in the Indenture), all the indebtedness of which subsidiary is nonrecourse to the Company or any other such subsidiary) or default on such indebtedness
that results in the acceleration of such indebtedness prior to its express maturity, if such indebtedness is not discharged, or such acceleration is not annulled, by the end of a period of 10 days after written notice to the Company by the Trustee
or to the Company and the Trustee by the holders of at least 25% in principal amount of the outstanding Notes;
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default by the Company in the performance of any other covenant contained in the Indenture for the benefit of the Notes that has not been remedied by the end of a period of 60 days after notice is given as specified in
the Indenture;
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the Companys failure to repurchase all of the Notes tendered for purchase upon such a Change of Control Repurchase Event; and
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certain events of bankruptcy, insolvency and reorganization of the Company or such a Significant Subsidiary.
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The offering resulted in net proceeds to the Company of approximately $489 million, which the Company intends to use, together with cash
on hand, to fund the redemption of all of the Companys outstanding 5.875% Senior Notes due May 1, 2019.