Summary
Baker Hughes Co (BKR) filed an 8-K on November 6, 2019, reporting on a significant debt offering and redemption. The company, through its subsidiaries BHGE LLC and Baker Hughes Co-Obligor, Inc., successfully closed a $525 million offering of 3.138% Senior Notes due 2029. The net proceeds from this new issuance were used to redeem the company's outstanding 3.200% Notes due 2021. This transaction effectively extends the maturity profile of the company's debt and likely aims to secure more favorable long-term interest rates. The new notes are governed by an indenture that includes standard covenants restricting the company and its subsidiaries from incurring additional liens or entering into sale and leaseback transactions, as well as limitations on consolidation, merger, and asset transfers. Investors should note the "make-whole" redemption provisions for early redemption before August 7, 2029, and a 100% redemption price thereafter. This move demonstrates proactive debt management by Baker Hughes.
Key Highlights
- 1Baker Hughes successfully issued $525 million in 3.138% Senior Notes due 2029.
- 2The offering closed on November 7, 2019.
- 3Proceeds were used to redeem the outstanding 3.200% Notes due 2021.
- 4The transaction extends the company's debt maturity profile.
- 5The new notes have a coupon rate of 3.138% and mature in November 2029.
- 6The indenture includes restrictions on liens, sale/leaseback transactions, and corporate restructurings.
- 7Early redemption prior to August 7, 2029, would incur a 'make-whole' cost.