Halliburton raising cash for Baker Hughes grab

HOUSTON, Nov. 6 (UPI) -- U.S. oil services company Halliburton said it was offering five tranches of senior notes, using the proceeds to help finance the acquisition of Baker Hughes.

Halliburton said it was offering $7.5 billion in senior notes to be issued in five tranches, with a maximum 5 percent fixed rate for a 30-year note maturing Nov. 15, 2045.

"Halliburton intends to use the net proceeds of the offering for general corporate purposes, including financing a portion of the cash consideration component of Halliburton's pending acquisition of Baker Hughes Inc.," the company said in a statement.

Both companies have struggled to cope with the weak trajectory for crude oil prices, down about 50 percent from when the merger plans were announced in late 2014. Each has eliminated staff and each has reported poor financial results this year.

Baker Hughes said third quarter revenue in North America alone was down 57 percent year-on-year because of "sharply lower activity and unfavorable pricing." Halliburton reported a loss from continuing operations of $54 million, compared with income of $55 million during second quarter 2015.

Oil services companies, which focus largely on exploration and production -- or the upstream sector -- are facing economic headwinds in an era of historically low oil prices. In a September report, the U.S. Energy Information Administration said total upstream investments could stay below the 10-year average if crude oil prices remain depressed.

Halliburton and Baker Hughes extended the timing of the earliest close of their merger by three weeks to Dec. 15, pointing to the complexity of the pending transaction.

Halliburton said if the deal is not carried through, it would use some of the proceeds from the sale of the notes for general corporate purposes.