Seadrill pulls $1bn bond

Seadrill has pulled a potential $1bn bond issue at the last moment blaming a sudden fall in its share price overnight.

It decided to cancel the five-year convertible bond issuance due to what it described as “the share price development on the day of issuance”.

Shares in Seadrill ended the trading day down by over 5% at $37.53 each in New York and NOK 232.80 in Oslo.

“Although the order book was covered, the adverse price movement led to an unattractive conversion price for the issue,” it said.

Proceeds from the issuance would have gone towards funding the newbuild program and for general corporate purposes.

Seadrill had appointed ABG Sundal Collier, BNP Paribas and Deutsche Bank to act as joint bookrunners for the offering.

The John Fredriksen drilling company sought to play down the significance of the failed fundraiser in a statement to investors.

“Following numerous successful transactions the Seadrill Group will have a cash balance of about $1.5bn by the end of July,” it said.

“In light of this strong liquidity position the company did not view this transaction as a requirement, but rather as an opportunity.”

On Monday fellow deepwater drilling company Ocean Rig unveiled plans to issue $500m worth of senior secured notes due 2022 in a private offering.