Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on November 18,
2021, Nabors Industries, Inc. (“NII”) entered into a purchase agreement (the “Purchase Agreement”) under
which NII agreed to sell $700 million aggregate principal amount of its 7.375% Senior Priority Guaranteed Notes due 2027 (the “Notes”)
to Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets, Inc., Wells Fargo Securities, LLC,
HSBC Securities (USA) Inc., Academy Securities, Inc. and B. Dyson Capital Advisors, a Division of Arcadia Securities, LLC (the “Initial
Purchasers”). The Notes are fully and unconditionally guaranteed by (i) Nabors Industries Ltd. (“Nabors Bermuda”
and, together with NII, “Nabors”), (ii) each of the subsidiaries (the “Upper Tier Notes Guarantors”) of Nabors
Bermuda that guarantee its existing 7.25% Senior Guaranteed Notes due 2026 and 7.50% Senior Guaranteed Notes due 2028 (together, the “Existing
Guaranteed Notes”) and (iii) certain lower tier subsidiaries (the “Lower Tier Notes Guarantors”) of Nabors Bermuda,
other than Nabors Alaska Drilling, Inc., that guarantee NII’s revolving credit facility (the “Revolving Credit Facility”)
and do not as of the date of the Indenture (as defined below) guarantee the Existing Guaranteed Notes (together with Nabors Bermuda and
the Upper Tier Notes Guarantors, the “Guarantors”).
The closing of the sale of the Notes occurred
on November 23, 2021. NII received net proceeds, after deducting estimated offering commissions and estimated net expenses, of approximately
$688.9 million. Nabors intends to use the net proceeds from this offering to repay approximately $457.5 million of amounts outstanding
under the Revolving Credit Facility and the remainder for general corporate purposes.
NII sold the Notes to the Initial Purchasers in
reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”). The Initial Purchasers then sold the Notes to (i) qualified institutional buyers pursuant to the exemption from registration
provided by Rule 144A and (ii) pursuant to Regulation S under the Securities Act. NII relied on these exemptions from registration
based in part on representations made by the Initial Purchasers in the Purchase Agreement.
The Notes are governed by an indenture, dated
as of November 23, 2021 (the “Indenture”), among NII, as issuer, the Guarantors, as guarantors, and Wilmington Trust,
National Association, as trustee (the “Trustee”).
The Notes will bear interest at an annual rate
of 7.375% and will mature on May 15, 2027. The Indenture includes customary covenants, subject to significant exceptions, that limit
the ability of Nabors Bermuda and its subsidiaries to, among other things, incur certain liens, enter into sale and leaseback transactions,
incur debt and engage in certain asset transfers. In the event of a Change of Control Triggering Event (as defined in the Indenture) with
respect to the Notes, the holders of the Notes may require NII to purchase all or a portion of their Notes at a purchase price equal to
101% of the principal amount of the Notes so purchased, plus accrued and unpaid interest, if any.
Prior to May 15, 2024, NII may redeem the
Notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued
and unpaid interest, if any. On or after May 15, 2024, NII may redeem the Notes, in whole or in part, at specified prices that decline
over time, plus accrued and unpaid interest, if any. In addition, NII may use the net cash proceeds of one or more equity offerings to
redeem up to 35% of the aggregate principal amount of Notes prior to May 15, 2024, at a price equal to 107.375% of the principal
amount thereof plus accrued and unpaid interest, if any.
The Notes are senior unsecured obligations of
NII and will rank pari passu in right of payment with all of NII’s existing and future unsubordinated debt and other obligations
obligations, except that the Notes are (i) effectively junior in right of payment to any of NII’s existing and future secured
obligations, including secured obligations under the Revolving Credit Facility, to the extent of the value of the collateral securing
such obligations thereunder, (ii) senior in right of payment to any of NII’s future subordinated debt and other obligations
that are expressly subordinated to the Notes, (iii) structurally subordinated to the obligations of creditors, including trade creditors,
of Nabors’ subsidiaries that do not guarantee the Notes, and (iv) guaranteed on a senior unsecured basis by the Guarantors,
except that the Guarantees of the Lower Tier Notes Guarantors are contractually subordinated in right of payment to guarantees by the
Lower Tier Notes Guarantors of certain senior guaranteed debt (the “Senior Guaranteed Debt”), including obligations under
the Revolving Credit Facility, as a result of a subordination agreement.
The Guarantees of the Notes are (i) senior
unsecured obligations of each Guarantor, other than the Guarantees of the Lower Tier Notes Guarantors, which are subordinate in right
of payment to guarantees by the Lower Tier Notes Guarantors of Senior Guaranteed Debt, (ii) rank pari passu in right of payment
with all existing and future senior obligations of the Guarantors that are not subordinated in right of payment to the Guarantees, other
than the Guarantees of the Lower Tier Notes Guarantors, which are subordinate in right of payment to guarantees by the Lower Tier Notes
Guarantors of Senior Guaranteed Debt, (iii) senior in right of payment to all future obligations of the Guarantors that are expressly
subordinated in right of payment of the Guarantees, (iv) effectively subordinated to all existing and future secured obligations
of the Guarantors to the extent of the value of the property and assets securing such obligations, including secured obligations under
the Revolving Credit Facility, and (v) structurally subordinated to any existing and future obligations of any of such Guarantor’s
subsidiaries that are not Guarantors.
A copy of the Indenture is included in this Form 8-K
as Exhibit 4.1 and incorporated herein by reference. The summary description of the Indenture in this report is qualified in its
entirety by reference to Exhibit 4.1.