Term Sheet ISIN: NO Prosafe SE 3 months NIBOR % Senior Unsecured Bond Issue 2011/2016 (the Bonds or the Loan )

Transcription

1 Term Sheet ISIN: NO Prosafe SE 3 months NIBOR % Senior Unsecured Bond Issue 2011/2016 (the Bonds or the Loan ) Settlement date: Expected to be 25 February 2011 Issuer: Currency: First Tranche: Borrowing Limit: Coupon rate: Settlement Date: Prosafe SE NOK NOK 500 million NOK 500 million 3 months NIBOR % p.a., quarterly interest payments. Expected to be 25 February Notice is expected to be given to subscribers minimum two banking days prior to Settlement Date. Maturity Date: 25 February 2016 (5 years after Settlement Date) at price First interest payment day: Last interest payment day: Interest Payments: Price: Nominal value: Status of the Bonds: Purpose of the Loan: Special Issues: 25 May 2011 (3 months after Settlement Date). 25 February 2016 (5 years after Settlement Date). Interest on the Bonds will start to accrue on Settlement Date and shall be payable quarterly in arrears on the interest payment day in February, May, August and November each year, or if the interest payment day does not fall on a Norwegian banking day on the first subsequent banking day. Day-count fraction for coupon is act/360, modified following (par). The Bonds will have a nominal value of NOK 500,000 each. Minimum subscription amount shall be NOK 500,000. The Bonds are not secured by any mortgage, pledge or any other security. The Bonds shall rank at least pari passu with all other senior obligations of the Issuer other than obligations which are mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The net proceeds from the Bonds shall be used for refinancing and for general corporate purposes. During the term of the Bonds, the Issuer shall (unless the Trustee or the Bondholders meeting (as the case may be) in writing has agreed to otherwise) comply with the following general covenants: a) Mergers: The Issuer shall not, and shall ensure that no Material Subsidiary shall, carry out any merger or other business combination or corporate reorganization involving consolidating the assets and obligations of the Issuer or any Material Subsidiary, with any other company or entity not being a member of the Group if such transaction would have a Material Adverse Effect. The Issuer shall notify the Bond Trustee of any such transaction, providing relevant details thereof, as well (6)

2 as, if applicable, its reasons for believing that the proposed transaction would not have a Material Adverse Effect. b) Demergers: The Issuer shall not, and shall ensure that no Material Subsidiary shall, carry out any de-merger or other corporate reorganization involving splitting the Issuer or any Material Subsidiary, into two or more separate companies or entities, if such transaction would have a Material Adverse Effect. The Issuer shall notify the Bond Trustee of any such transaction, providing relevant details thereof, as well as, if applicable, its reasons for believing that the proposed transaction would not have a Material Adverse Effect. c) Continuation of business: The Issuer shall not, and shall ensure that no Material Subsidiary shall, cease to carry out its business. The Issuer shall procure that no material (substantial) change is made to the general nature or scope of the business of the Issuer or any Material Subsidiary from that carried on at the date of the Bond Agreement, or as contemplated by the Bond Agreement in a manner that might jeopardize the Issuer s fulfillment of its obligations under the Bond Agreement. d) Disposal of business: The Issuer shall not, and shall ensure that no Material Subsidiary shall, sell or otherwise dispose of all or a substantial part of its assets or operations, in a manner that might jeopardize the Issuers fulfillment of its obligations under the Bond Agreement. e) Financial assistance: The Issuer shall not grant any new loans to, new guarantees for or other similar financial assistance to any third party not being a member of the Group (including any joint venture companies),(other than in ordinary course of business). f) Cross default: If for the Issuer or any Material Subsidiary, the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (i) to (iv) below exceeds a total of NOK 75 million, or the equivalent thereof in other currencies; (i) any Financial Indebtedness or guarantee is not paid when due nor within any originally applicable grace period; (ii) any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); (iii) any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described); or (iv) any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described). g) Reporting: The Issuer shall of its own accord make management and financial reports (quarterly, on a consolidated basis, written in English) available to the Trustee and on its web pages for public distribution not later than 150 days after the end of the financial year and not later than 90 days after the end of the relevant interim period. h) Listing: The Issuer s shares shall remain listed on the Oslo Stock Exchange or on another stock exchange reasonably acceptable to the Trustee. i) Ownership to Material Subsidiary: The Issuer shall not sell, transfer, assign or otherwise dilute or dispose of any shares or any other ownership interest in any Material Subsidiary, however this covenant will not apply for sale, transfer etc. to other members of the Group provided that such transactions do not have a Material Adverse Effect. j) Arm s length transaction: The Issuer shall not without the prior written consent of the Trustee permit any member of the Group to engage in, directly or indirectly, (6)

3 any transaction with any party, except in the ordinary course of such member of the Group's business and upon fair and reasonable terms that are no less favorable to the member of the Group than those which might be obtained in an arm's length transaction at the time. Financial Covenants: The Issuer undertakes to comply with the following financial covenants at any time during the term of the Bonds: a) Equity Ratio: The Issuer shall ensure that the Equity Ratio of the Group at all times shall not fall below 30.0%. b) Leverage Ratio: The Issuer (on a consolidated basis) shall at all times ensure that the Leverage Ratio of the Group will not exceed The Issuer must report that the Issuer is in compliance with the Financial Covenants semiannually in connection with the Reporting as per 30 June and 31 December each year. Definitions: Equity Ratio means the ratio of Value Adjusted Equity to Value Adjusted Total Assets. Value Adjusted Equity means the Issuer's consolidated equity adjusted for the Market Value of the Rigs. Value Adjusted Total Assets means the Issuer's consolidated total assets adjusted for the Market Value of the Rigs. Market Value of the Rigs means the average value of the Rigs from two reputable and independent appraisers appointed by the Issuer. Such appraisers to be the same appraisers as for any bank loan facilities, to the extent possible. Leverage Ratio means the sum of the Group s Total Debt divided by the Group s EBITDA (on a trailing four-quarter basis). Total Debt means the sum of any of (i) moneys borrowed and debit balances at banks or other financial institutions, (ii) the issue of bonds, notes, debentures or any similar instrument and (iii) the amount of any liability in respect of finance leases. Financial Indebtedness means any indebtedness incurred in respect of: (a) moneys borrowed, including acceptance credit; (b) any bond, note, debenture, loan stock or other similar instrument; (c) the amount of any liability in respect of any lease, hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease; (d) receivables sold or discounted (other than any receivables sold on a nonrecourse basis; (e) any sale and lease-back transaction, or similar transaction which is treated as indebtedness under GAAP; (f) the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price, including without limitation currency or interest rate swaps, caps or collar transactions (and, when calculating the value of the transaction, only the mark-to-market value shall be taken into account); (h) any amounts raised under any other transactions having the commercial effect of a borrowing or raising of money, whether recorded in the balance sheet or not (including any forward sale of purchase agreement); (i) any counter-indemnity obligation in respect of a guarantee, indemnity, (6)

4 (j) bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institutions; and (without double counting) any guarantee, indemnity or similar assurance against financial loss of any person in respect of any of the items referred to in( a) through (i) above. GAAP means the generally accepted accounting practice and principles in the country in which the Issuer is incorporated including, if applicable, the International Financial Reporting Standards (IFRS) and guidelines and interpretations issued by the International Accounting Standards Board (or any predecessor and successor thereof), in force from time to time. EBITDA means for any relevant period, the consolidated earnings or the Group before: (a) any interest, discounts or other fees incurred or payable by any Group Company in respect of Financial Indebtedness; (b) any provision on account of taxation; (c) any item treated as exceptional or extraordinary items; and (d) any amount attributable to depreciation of tangible assets and the amortization of intangible assets. However, in the case of an amendment of the lease accounting rules as proposed by FASB/IASB, the consolidated earnings of the Group shall include interest earned on finance leases. Rigs means all and any of the accommodation/service rigs owned by any member of the Group. Group: Material Subsidiary: Subsidiaries: Material Adverse Effect: Change of Control: Change of Control Event: Group means the Issuer and all its (direct or indirect owned) Subsidiaries from time to time, and a Group Company means the Issuer or any of the Subsidiaries. Material Subsidiaries means any Group Company at any time owning Rigs (present and future). Subsidiaries means an entity over which another entity or person has a determining influence due to (i) direct and indirect ownership of shares or other ownership interests, and/or (ii) agreement, understanding or other arrangement. An entity shall always be considered to be the subsidiary of another entity or person if such entity or person has such number of shares or ownership interests so as to represent the majority of the votes in the entity, or has the right to vote in or vote out a majority of the directors in the entity. Material Adverse Effect means a material adverse effect on: (a) the business, financial condition or operations of the Group taken as a whole, (b) the Issuer s ability to perform and comply with its obligations under the Bond Agreement; or (c) the validity or enforceability of the Bond Agreement. Upon a Change of Control Event occurring, each Bondholder shall have a right of prepayment (Put Option) of the Bonds at a price of 100% of par value (plus accrued interest) during a period of 60 days following the notice of a Change of Control Event. Change of Control Event means any person or group (as such term is defined in the Norwegian Limited Liability Companies Act 1-3) becomes the owner, directly or indirectly, of more than 50% of the outstanding shares of the Issuer. Approvals: The Bonds have been issued in accordance with the Issuer s Board approval dated 8 December Issuer s ownership of Bonds: Joint Lead Managers: The Issuer has the right to acquire and own the Bonds. Such Bonds may at the Issuer s discretion be retained by the Issuer, sold or discharged. ABG Sundal Collier Norge ASA, Munkedamsveien 45E, NO-0115 Oslo, Norway; and Pareto Securities AS, Dronning Mauds gt. 3, NO-0115 Oslo, Norway (6)

5 Trustee: Registration: Paying Agent: Issuer s reg. number: Amortization: Taxation: Documentation: Bond Agreement: Norsk Tillitsmann ASA, Postboks 1470 Vika, 0116 Oslo. The Norwegian Central Securities Depository (VPS). Principal and interest accrued will be credited the Bondholders through VPS. Nordea Bank Norge ASA SE4. The Bonds shall be repaid in full at final Maturity Date at par value. The Issuer shall pay any stamp duty and other public fees accruing in connection with the Bonds, but not in respect of trading in the secondary market (except to the extent required by applicable laws), and shall deduct at source any applicable withholding tax payable pursuant to law. A Norwegian law based stand-alone Bond Agreement between the Issuer and the Trustee. The Bond Agreement will be entered into by the Issuer and the Trustee acting as the Bondholders representative, and is to be based on (to the extent possible) PRS06 PRO with ISIN NO The Bond Agreement shall regulate the Bondholders rights and obligations with respect to the Bonds, and it shall be based on Norwegian bond market standard at the time of Settlement Date. If any discrepancy should occur between this Term Sheet and the Bond Agreement, then the Bond Agreement shall prevail. Each subscriber in the Bonds, such subscription documented by a subscription agreement, a taped telephone conversation, or otherwise, is deemed to have granted authority to the Trustee to finalize the Bond Agreement and the related security documents. Minor adjustments to the structure described in this Term Sheet may occur. The Bond Agreement specifies that all Bond transfers shall be subject to the terms thereof, and the Trustee and all Bond transferees shall, when acquiring the Bonds, be deemed to have accepted the terms of the Bond Agreement, which specifies that all such transferees shall automatically become parties to the Bond Agreement upon completed transfer having been registered in the VPS, without any further action required to be taken or formalities to be complied with. The Bond Agreement shall specify that it shall be made available to the general public for inspection purposes and may, until redemption in full of the Bonds, be obtained on request by the Trustee or the Issuer, and such availability shall be recorded in the VPS particulars relating to the Bonds. Stock Exchange listing: Market making: Eligible purchasers: An application will be made for the Bonds to be listed on Oslo Børs. No market-maker agreement has been made for this Issue. The Bonds are not being offered to and may not be purchased by investors located in the United States except for Qualified Institutional Buyers (QIBs) within the meaning of Rule 144A under the U.S. Securities Act of 1933, as amended ( Securities Act ). In addition to the Subscription Agreement that each investor will be required to execute, each U.S. investor that wishes to purchase Bonds will be required to execute and deliver to the Issuer a certification in a form to be provided by the Issuer stating, among other things, that the investor is a QIB. The Bonds may not be purchased by, or for the benefit of, persons resident in Canada. Transfer restrictions: Bondholders located in the United States will not be permitted to transfer the Bonds except (a) subject to an effective registration statement under the Securities Act, (b) to a person that the Bondholder reasonably believes is a QIB within the meaning of Rule 144A that is purchasing for its own account, or the account of another QIB, to whom notice is given that the resale, pledge or other transfer may be made in reliance on Rule 144A, (c) outside the United States in accordance with Regulation S under the Securities Act in a transaction on the Oslo Børs, and (d) pursuant to an exemption (6)

6 from registration under the Securities Act provided by Rule 144 thereunder (if available). The Bonds may not, subject to applicable Canadian laws, be traded in Canada for a period of four months and a day from the date the Bonds were originally issued. Subject to: The issue of Bonds shall be subject to finalized loan documentation and approval of loan documentation by the Issuer and the Trustee. Stavanger/Oslo, 11 February 2011 As Issuer As Joint Lead Manager As Joint Lead Manager (6)