Bristow closes $350 million offering

Bristow Caribbean

Bristow has completed its private $350 million notes offering, offering the group greater financial certainty though higher costs.

The issue had initially been set as a  $300 million private offering but was subsequently raised to the $350 million level when investors expressed enthusiasm for unsecured notes .

The senior secured notes carrying an interest rate of 8.75% mature on 1 March 2023 and are effectively secured using the group’s fleet of 77 aircraft as collateral. However, the company has the right to redeem all or part of the issue at 100% of the notes’ principal value at any time up to 1 March 2020. The usual provisos attach to the notes – for example Bristow may not alienate the collateralised assets nor raise any debt more senior to that in the recent issue.

Proceeds from the issue will be used to pay off amounts outstanding on Bristow’s revolving credit facility that expires in 2022. However, should more than $125 million of the company’s existing senior debt remain outstanding in June 2022, holders of the current issue of secured notes can demand mandatory redemption.

Moody’s rated the originally proposed $300 million offering as ‘B2’ and the rating has remained unchanged since the upsize. The company’s overall credit rating was downgraded in June last year with a negative outlook. This followed a downgrade to B1 in September 2016.

Sajjad Alam, senior analyst at Moody’s said: “Although this transaction will increase Bristow’s gross debt and interest expense, weakening its leverage and coverage ratios, the company will face reduced refinancing risk, have more cash cushion and avoid restrictive financial covenants for several years allowing time for financial performance and industry conditions to recover.”

“Bristow will have roughly $350 million of balance-sheet cash and no meaningful debt maturities until 2022 after closing this transaction.”