Debt

9 Months Ended

Sep. 30, 2024

Debt

Debt

Note 5 Debt

Debt consisted of the following:

	September 30,		December 31,
	2024		2023
	(In thousands)
0.75% senior exchangeable notes due January 2024	$	—	$	155,529
5.75% senior notes due February 2025		—		474,092
7.25% senior guaranteed notes due January 2026		—		555,902
7.375% senior priority guaranteed notes due May 2027		700,000		700,000
7.50% senior guaranteed notes due January 2028		389,609		389,609
1.75% senior exchangeable notes due June 2029		250,000		250,000
9.125% senior priority guaranteed notes due January 2030		650,000		650,000
8.875% senior guaranteed notes due August 2031		550,000		—
	$	2,539,609	$	3,175,132
Less: current portion		—		629,621
Less: deferred financing costs		36,339		33,992
Long-term debt	$	2,503,270	$	2,511,519

During the nine months ended September 30, 2024, we fully redeemed the $474.1 million remaining balance of the 5.75% senior notes due February 2025 for approximately $487.0 million in cash, including principal, premium of $1.4 million and $11.5 million in accrued and unpaid interest. We also fully redeemed the $555.9 million remaining balance of the 7.25% senior guaranteed notes due January 2026 for approximately $568.3 million in cash, including principal, premium of $10.1 million and $2.4 million in accrued and unpaid interest. In connection with the redemptions, we recognized a $14.9 million loss for the nine months ended September 30, 2024 which is included in Other, net in our condensed consolidated statement of income (loss). In addition, during the nine months ended September 30, 2024, the remaining balance of the 0.75% senior exchangeable notes due January 2024 were fully redeemed.

Credit Agreement

On June 17, 2024, Nabors Delaware amended and restated its credit agreement (the “2024 Credit Agreement”). Under the 2024 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 $350.0 million, and the issuing banks have committed to provide a standalone letter of credit tranche that permits Nabors Delaware to issue reimbursement obligations under letters of credit in an aggregate principal amount at any time outstanding not in excess of $125.0 million. Letters of credit issued do not affect revolving loan capacity and vice versa. The 2024 Credit Agreement contains a $200.0 million uncommitted accordion feature that can be applied to increase the commitments under either the revolving loans or the letter of credit tranche, or both.

The Company is required to maintain an interest coverage ratio (EBITDA/interest expense) of 2.75:1.00, and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal

amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90^th day.

Additionally, the Company is subject to covenants, which are subject to certain exceptions and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100.0 million). The agreement also includes a collateral coverage requirement that the collateral rig fair value is to be no less than the collateral coverage threshold, as defined in the agreement.  This requirement includes an independent appraisal report to be delivered every 6 months following the closing date.

As of September 30, 2024, we had no borrowings and $51.7 million of letters of credit outstanding under our 2024 Credit Agreement. The weighted average interest rate on borrowings under the 2024 Credit Agreement at September 30, 2024 was 8.17%. In order to make any future borrowings under the 2024 Credit Agreement, Nabors and certain of its wholly owned subsidiaries are subject to compliance with the conditions and covenants contained therein, including compliance with applicable financial ratios.

As of the date of this report, we were in compliance with all covenants under the 2024 Credit Agreement. We expect to remain in compliance with all covenants under the 2024 Credit Agreement during the twelve-month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.

8.875% Senior Guaranteed Notes due August 2031

On July 22, 2024, Nabors issued $550.0 million in aggregate principal amount of 8.875% senior guaranteed notes, which are fully and unconditionally guaranteed by Nabors and certain of Nabors’ indirect wholly-owned subsidiaries. Interest on the notes is payable on February 15 and August 15 of each year. The notes have a maturity date of August 15, 2031.