Teekay Corporation Announces Pricing of $250 Million Private Offering of Senior Secured Notes
May 02 2019 - 1:43PM
Teekay Corporation (Teekay or the Company) (NYSE:TK) announced
today the pricing at par of $250 million in aggregate principal
amount of 9.25% senior secured notes due November 2022 (the
Notes). The Company decided to reduce the offering amount
from $300 million as a result of its previously announced agreement
to sell the Company’s remaining interests in Teekay Offshore
Partners L.P. (Teekay Offshore) (NYSE: TOO) to
Brookfield Business Partners L.P. (NYSE: BBU)(TSX: BBU.UN),
together with its institutional partners
(collectively Brookfield), for $100 million in cash. The
Notes are being offered to eligible purchasers under Rule 144A and
Regulation S of the U.S. Securities Act of 1933, as amended (the
Securities Act). The Notes will initially be guaranteed on a senior
secured basis by certain of Teekay’s subsidiaries and will
initially be secured by first-priority liens on two of Teekay’s
floating production, storage and offloading (FPSO) units, a pledge
of the equity interests of the Teekay subsidiary that owns all of
Teekay’s common units of Teekay LNG Partners L.P. and all of
Teekay’s Class A common shares of Teekay Tankers Ltd. and a pledge
of the equity interests in the Teekay subsidiaries that own its
three FPSO units. The offering of the Notes (the Offering) is
expected to close on May 13, 2019, subject to customary closing
conditions.
Teekay expects to use the net proceeds from the
Offering to partially fund its previously announced tender offer to
purchase any and all of its outstanding 8.5% Senior Notes due 2020
(the 2020 Notes) and any fees and expenses thereof. The remainder
of the tender offer is expected to be funded with the $100 million
of proceeds from the sale to Brookfield of Teekay’s remaining
interests in Teekay Offshore, up to $160 million of existing cash
and, if necessary, borrowings under Teekay’s equity margin loan
facility. The Offering is conditioned upon the receipt of consents
of at least a majority of the aggregate principal amount of the
outstanding 2020 Notes and the effectiveness of certain proposed
amendments to the indenture governing the 2020 Notes (which will
eliminate substantially all of the restrictive covenants and
certain events of default and related provisions).
The Company intends to provide additional
information about the Offering, the sale to Brookfield of its
interests in Teekay Offshore and the expected impact of these
transactions on the Company’s plans during its first quarter of
2019 earnings conference call scheduled for May 23, 2019.
The Notes will not be registered under the
Securities Act, or any state securities laws, and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements of the
Securities Act and applicable state securities laws. The Notes were
offered and will be sold only to persons reasonably believed to be
qualified institutional buyers in the United States pursuant to
Rule 144A under the Securities Act and to certain non-U.S. persons
outside the United States in compliance with Regulation S under the
Securities Act.
This news release does not constitute an offer
to sell or a solicitation of an offer to buy the securities
described herein, nor shall there be any sale of these securities
in any state or jurisdiction in which such an offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
About Teekay
Teekay is a leading provider of international
crude oil and gas marine transportation services and also provides
offshore production and logistics. Teekay provides these services
primarily through its directly-owned fleet and its controlling
ownership interests in Teekay LNG Partners L.P. (NYSE:TGP), the
world’s third largest independent owner and operator of LNG
carriers, and Teekay Tankers Ltd. (NYSE:TNK), one of the world’s
largest owners and operators of mid-sized crude tankers,. The
consolidated Teekay entities manage and operate total assets under
management of approximately $11 billion, comprised of approximately
155 liquefied gas, offshore, and conventional tanker assets. With
offices in 12 countries and approximately 5,600 seagoing and
shore-based employees, Teekay provides a comprehensive set of
marine services to the world’s leading oil and gas companies.
Teekay’s common stock trades on the New York
Stock Exchange under the symbol “TK”.
For Investor
Relationsenquiries contact:
Ryan HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
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