Item 1.01 Entry into a Material Definitive Agreement.
On January 21, 2022, Nabors Industries, Inc. (“Nabors Delaware”),
a wholly owned subsidiary of Nabors Industries Ltd. (the “Company”), and the Company entered into a credit agreement (the
“2022 Credit Agreement”), among themselves, the Revolving Guarantors (as defined below) and other guarantors from time to
time party thereto, the issuing banks (the “Issuing Banks”) and other lenders party thereto (the “Lenders”) and
Citibank, N.A., as administrative agent. Under the 2022 Credit Agreement, Citibank, N.A. and Wells Fargo Securities, LLC acted as joint
lead arrangers and joint bookrunners.
Under the 2022 Credit Agreement, the Lenders have committed to provide
to Nabors Delaware an aggregate principal amount of revolving loans at any time outstanding not in excess of $350,000,000 (with an accordion
feature for an additional $100,000,000), and including sub-facilities provided by certain of the Lenders for letters of credit in an aggregate
principal amount at any time outstanding not in excess of $100,000,000.
The 2022 Credit Agreement permits the incurrence of additional indebtedness
secured by liens, which may include liens on the collateral securing the facility, in an amount up to $150,000,000 as well as a grower
basket for term loans in an amount not to exceed $100,000,000 secured by liens not on the collateral. In lieu of the minimum liquidity
requirement and guarantor asset coverage ratio contained in the Company’s previous credit agreement, under the 2022 Credit Agreement,
the Company is required to maintain an interest coverage ratio (EBITDA/interest expense), which increases on a quarterly basis, and a
minimum guarantor value, requiring the Revolver Guarantors (other than the Company) and their subsidiaries to own at least 90% of the
consolidated property, plant and equipment of the Company. In addition, there has been a reduction to the collateral coverage ratio as
compared to the previous facility.
The commitments will be guaranteed by the Company, Nabors International
Management Limited, Nabors Drilling Technologies USA, Inc., Nabors Holdings Ltd., Nabors Drilling Holdings Inc., Nabors Lux 2, Nabors
Lux Finance 1, Nabors Global Holdings Limited, Canrig Drilling Technology Canada Ltd., Nabors Alaska Drilling, Inc. and each other subsidiary
that from time to time delivers a guaranty pursuant to the 2022 Credit Agreement (the “Revolver Guarantors”). The facility
matures on the earlier of (a) January 21, 2026 or (b) (i) to the extent any principal amount of Nabors Delaware’s existing 5.1%
senior notes due 2023, 5.5% senior notes due 2023 and 5.75% senior notes due 2025 remains outstanding on the date that is 90 days prior
to the applicable maturity date for such indebtedness, then such 90th day or (ii) to the extent 50% or more of the outstanding (as of
the closing date) aggregate principal amount of the 0.75% senior exchangeable notes due 2024 remains outstanding and not refinanced or
defeased on the date that is 90 days prior to the maturity date for such Indebtedness, then such 90th day.
At the request of Nabors Delaware, each Issuing Bank will issue standby
letters of credit in a minimum face amount of $3,000. Nabors Delaware will pay a letter of credit fee, payable on a quarterly basis, in
an amount equal to the interest margin for Secured Overnight Financing Rate (“SOFR”) borrowings (which with respect to performance
letters of credit will be multiplied by 0.50) multiplied by the daily amount of aggregate L/C Exposure (as defined in the 2022 Credit
Agreement). In addition, in connection with each letter of credit, Nabors Delaware will pay to each Issuing Bank (i) such Issuing Bank’s
standard issuance and administrative fees and expenses and (ii) a fronting fee, which shall accrue at the rate of 0.125% per annum on
the average daily amount of letter of credit exposure.
The borrowings under the 2022 Credit Agreement bear interest, at Nabors
Delaware’s option, at either (i) the “Alternate Base Rate” plus the applicable interest margin, payable quarterly in
arrears or (ii) interest periods of one or three or six months at an annual rate equal to the Adjusted Term SOFR (as defined in the 2022
Credit Agreement) in effect therefor, plus the applicable interest margin. The “Alternate Base Rate” is defined, for any day,
as a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate, as published by the Federal Reserve Bank of New York,
plus 0.50%, (b) the corporate base rate of Citibank, N.A., and (c) Adjusted Term SOFR for an interest period of one-month beginning on
such day plus 1.00%.
Additionally, under the 2022 Credit Agreement, the Company will be
subject to certain covenants, which are subject to certain exceptions and include, among others, (i) a covenant restricting its ability
to incur liens (subject to the additional liens basket of up to $150,000,000), (ii) a covenant restricting its ability to pay dividends
or make other distributions with respect to its capital stock and to repurchase certain indebtedness and (iii) a covenant restricting
the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100,000,000).
A copy of the 2022 Credit Agreement, which is filed as an exhibit to
this Form 8-K as Exhibit 10.1, is incorporated herein by reference and should be read in its entirety for a complete description of its
provisions. The summary in this report is qualified in its entirety by the text of such provisions.