Item 8.01 Other Events
On December 1, 2020, Transocean Ltd. issued a press release announcing the
Transactions, which resolve the allegations contained in the Notices with
respect to the 2025 Guaranteed Notes and 2027 Guaranteed Notes. The Transactions
consisted of the Amendment, Contributions, Mergers and Supplemental Indentures,
each as defined and described below. A copy of the press release is attached
hereto as Exhibit 99.1 and incorporated by reference herein.
Nothing herein is or shall be construed as an admission of fact or liability, a
stipulation or a waiver, or binding on the Company or its affiliates or an
acknowledgement of any breach or default under any financial instrument of the
Company, including, but not limited to the 2027 Guaranteed Notes or 2025
Guaranteed Notes. Each statement contained herein is made without prejudice,
with a full reservation of all rights, remedies, claims and defenses.
Amendment to Revolving Credit Facility; Contribution of Assets
On November 30, 2020, Transocean Inc., certain of its subsidiaries, Citibank,
N.A., as administrative agent, and certain lenders entered into the fourth
amendment (the "Amendment") to the Company's credit agreement dated June 22,
2018 (as amended, the "Revolving Credit Facility"). The Amendment was entered
into in connection with contributions (the "Contributions") by Transocean Asset
Holdings 1 Limited, Transocean Asset Holdings 2 Limited and Transocean Asset
Holdings 3 Limited (collectively, the "Transocean Asset Holdings Entities") of
their respective assets, consisting of equity interests in subsidiaries, to
newly-formed, wholly-owned subsidiaries, Transocean Sub Asset Holdings 1
Limited, Transocean Sub Asset Holdings 2 Limited and Transocean Sub Asset
Holdings 3 Limited (collectively, the "Transocean Sub Asset Holdings Entities"),
respectively. Among other things, the Amendment provides that the Transocean Sub
Asset Holdings Entities guarantee the obligations under the Revolving Credit
Facility and permits the Transocean Asset Holdings Entities to, among other
things, guarantee certain other obligations, including the Senior Guaranteed
Securities (as defined below). Accordingly, the Revolving Credit Facility
remains structurally senior to the unsecured debt securities issued by
Transocean Inc., including the Existing Guaranteed Notes (as defined below) and
the Senior Guaranteed Securities, to the extent of the value of the assets of
the Transocean Sub Asset Holdings Entities due to the fact that such other debt
securities, including the Existing Guaranteed Notes and the Senior Guaranteed
Securities, do not, and will not, benefit from guarantees from the Transocean
Sub Asset Holdings Entities. In addition, the Amendment includes a provision for
a temporary reduction in available commitments to $1.0 billion during any such
period for which the Company's reported total leverage ratio as of the last day
of the most recently ended fiscal quarter exceeds 10.00:1.00.
The foregoing description of the Amendment does not purport to be complete and
is qualified in its entirety by reference to the complete document, which is
filed as Exhibit 10.1 to this Current Report . For a description of the
Revolving Credit Facility, see also Item 7 of Transocean Ltd.'s Annual Report on
Form 10-K for the fiscal year ended December 31, 2019 .
Supplemental Indenture to Certain Indentures; Mergers
On November 30, 2020, following the Contributions and the entry into the
Amendment, the Company and certain of its subsidiaries entered into a
supplemental indenture with Wells Fargo Bank, National Association, as trustee
(the "Trustee"), to each of (i) the Indenture, dated September 11, 2020, among
the Company, the guarantors party thereto and the Trustee, governing Transocean
Inc.'s 11.50% Senior Guaranteed Notes due 2027 (the "Senior Guaranteed Notes"),
and (ii) the Indenture, dated August 14, 2020, among the Company, the guarantors
party thereto and the Trustee, governing Transocean Inc.'s 2.5% Senior
Guaranteed Exchangeable Bonds due 2027 (the "Senior Guaranteed Exchangeable
Bonds" and together with the Senior Guaranteed Notes, the "Senior Guaranteed
Securities").
Pursuant to each such supplemental indenture (each, a "Supplemental Indenture"),
Transocean Holdings 1 Limited, Transocean Holdings 2 Limited and Transocean
Holdings 3 Limited (collectively, the "Transocean Holdings Entities") expressly
assumed the obligations of Transocean Mid Holdings 1 Limited, Transocean Mid
Holdings 2 Limited and Transocean Mid Holdings 3 Limited (collectively, the
"Transocean Mid Holdings Entities") under their respective guarantees of the
Senior Guaranteed Securities as a result of Transocean Mid Holdings 1 Limited,
Transocean Mid Holdings 2 Limited and Transocean Mid Holdings 3 Limited merging
with and into Transocean Holdings 1 Limited, Transocean Holdings 2 Limited and
Transocean Holdings 3 Limited, respectively, with Transocean Holdings 1 Limited,
Transocean Holdings 2 Limited and Transocean Holdings 3 Limited as the
respective surviving entities of such mergers (collectively, the "Mergers").
Immediately following such Mergers, each of Transocean Holdings 1 Limited,
Transocean Holdings 2 Limited and Transocean Holdings 3 Limited directly
wholly-own all of the outstanding equity of Transocean Asset Holdings 1 Limited,
Transocean Asset Holdings 2 Limited and Transocean Asset Holdings 3 Limited,
respectively, exactly as they did prior to the Prior Transactions.
In addition, pursuant to each Supplemental Indenture, the Transocean Asset
Holdings Entities have also guaranteed the Senior Guaranteed Securities.
Accordingly, the Senior Guaranteed Securities remain structurally senior to
other debt securities issued by Transocean Inc., including the 2025 Guaranteed
Notes, the 7.50% Senior Notes due 2026 and the 2027 Guaranteed Notes
(collectively, the "Existing Guaranteed Notes"), to the extent of the value of
the assets of the Transocean Asset Holdings Entities due to the fact that such
other debt securities, including the Existing Guaranteed Notes, do not, and will
not, benefit from guarantees from the Transocean Asset Holdings Entities.
The foregoing description of the Supplemental Indentures does not purport to be
complete and is qualified in its entirety by reference to the complete
documents, which are attached hereto as Exhibit 4.1 and 4.2 . For a
description of the Senior Guaranteed Securities, see also Item 1.01 of
Transocean Ltd.'s Current Reports on Form 8-K dated August 14, 2020 and
September 11, 2020 .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1 Supplemental Indenture, dated November 30, 2020, by and among
Transocean Inc., Transocean Ltd., certain of Transocean Inc.'s
subsidiaries, and Wells Fargo Bank, National Association, as trustee,
supplementing the Indenture dated as of September 11, 2020.
4.2 Supplemental Indenture, dated November 30, 2020, by and among
Transocean Inc., Transocean Ltd., certain of Transocean Inc.'s
subsidiaries, and Wells Fargo Bank, National Association, as trustee,
supplementing the Indenture dated as of August 14, 2020.
10.1 Fourth Amendment to Credit Agreement, dated November 30, 2020, among
Transocean Inc., the lenders and issuing banks parties thereto,
Citibank, N.A., as administrative agent, and for the limited purposes
set forth therein, certain of Transocean Inc.'s subsidiaries.
99.1 Press Release, dated November 30, 2020, Announcing Amendments to
Certain Financing Documents and Internal Reorganization Transactions to
Resolve Allegations Contained in Purported Notices of Default.
101 Interactive data files pursuant to Rule 405 of Regulation S-T formatted
in Inline Extensible Business Reporting Language
104 Cover Page Interactive Data File (formatted as inline XBRL).
Forward-Looking Statements
The statements described herein that are not historical facts are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements could contain words such as "possible," "intend,"
"will," "if," "expect," or other similar expressions. Forward-looking statements
are based on management's current expectations and assumptions, and are subject
to inherent uncertainties, risks and changes in circumstances that are difficult
to predict. As a result, actual results could differ materially from those
indicated in these forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, estimated duration
of customer contracts, contract dayrate amounts, future contract commencement
dates and locations, planned shipyard projects and other out-of-service time,
sales of drilling units, timing of the company's newbuild deliveries, operating
hazards and delays, risks associated with international operations, actions by
customers and other third parties, the fluctuation of current and future prices
of oil and gas, the global and regional supply and demand for oil and gas, the
intention to scrap certain drilling rigs, the success of our business following
prior acquisitions, the effects of the spread of and mitigation efforts by
governments, businesses and individuals related to contagious illnesses, such as
COVID-19, and other factors, including those and other risks discussed in the
company's
most recent Annual Report on Form 10-K for the year ended December 31, 2019 ,
and in the company's other filings with the SEC, which are available free of
charge on the SEC's website at: www.sec.gov. Should one or more of these risks
or uncertainties materialize (or the other consequences of such a development
worsen), or should underlying assumptions prove incorrect, actual results may
vary materially from those indicated or expressed or implied by such
forward-looking statements. All subsequent written and oral forward-looking
statements attributable to the company or to persons acting on our behalf are
expressly qualified in their entirety by reference to these risks and
uncertainties. You should not place undue reliance on forward-looking
statements. Each forward-looking statement speaks only as of the date of the
particular statement, and we undertake no obligation to publicly update or
revise any forward-looking statements to reflect events or circumstances that
occur, or which we become aware of, after the date hereof, except as otherwise
may be required by law. All non-GAAP financial measure reconciliations to the
most comparative GAAP measure are displayed in quantitative schedules on the
company's website at: www.deepwater.com.
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