Item 1.01 Entry into a Material Definitive
Agreement
Exchangeable Notes Offering
As previously disclosed, on February 9, 2023, Nabors
Industries, Inc. (“NII”), a wholly owned subsidiary of Nabors Industries Ltd. (“NIL”), and NIL entered
into a purchase agreement (the “Purchase Agreement”) under which NII agreed to sell $225,000,000 aggregate principal
amount of its 1.750% Exchangeable Senior Notes due June 15, 2029 (the “Firm Notes”) to Goldman Sachs & Co.
LLC, Wells Fargo Securities, LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets, Inc., HSBC Securities (USA)
Inc., Academy Securities Inc. and Nomura Securities International, Inc. (collectively, the “Initial Purchasers”). In
addition, NII granted certain of the Initial Purchasers a 30-day option to purchase up to an additional $25,000,000 in aggregate
principal amount of the 1.750% Exchangeable Senior Notes due June 15, 2029 (the “Option Notes” and, together with
the Firm Notes, the “Exchangeable Notes”) on the same terms and conditions. This option was exercised in full on
February 10, 2023.
The Exchangeable Notes are fully and unconditionally guaranteed by
NIL. The closing of the sale of the Exchangeable Notes occurred on February 14, 2023. NII received net proceeds, after deducting
commissions and estimated offering expenses, of approximately $242.2 million from the sale of the Exchangeable Notes. NIL intends
to use the net proceeds from the offering to redeem all of its outstanding 9.00% senior priority guaranteed notes due February 2025.
Any excess proceeds will be used for general corporate purposes, which may include the repayment of other indebtedness.
The Exchangeable Notes were sold in a private offering exempt from
the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) to persons reasonably believed
to be qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act.
The Exchangeable Notes were issued pursuant to an indenture, dated
as of February 14, 2023 (the “Indenture”), among NII, as issuer, NIL, as guarantor and Wilmington Trust, National Association,
as trustee.
The Exchangeable Notes are general unsecured obligations of NII and
bear interest at a rate of 1.750% per year payable semi-annually in arrears in cash on June 15 and December 15, beginning on
December 15, 2023. The Exchangeable Notes mature on June 15, 2029, unless earlier repurchased, redeemed or exchanged. NIL’s
guarantee of the Exchangeable Notes is a general unsecured obligation of NIL.
The exchange rate will initially be 4.7056 common shares of NIL per
$1,000 principal amount of the Exchangeable Notes (equivalent to an initial exchange price of approximately $212.51 per common share of
NIL). The exchange rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In
addition, following certain corporate events that occur prior to the maturity date or upon our issuance of a notice of redemption the
exchange rate will increase for a holder who elects to exchange its Exchangeable Notes in connection with such a corporate event or redemption
in certain circumstances.
Prior to the close of business on the business day immediately preceding
December 15, 2028, holders will be entitled to exchange their Exchangeable Notes for common shares of NIL only upon satisfaction
of one or more of the following conditions: (1) during any fiscal quarter commencing after the
fiscal quarter ending June 30, 2023 (and only during such fiscal quarter), if the closing sale price of the common shares of NIL
for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading
day of the immediately preceding fiscal quarter is greater than 130% of the applicable exchange price on each applicable trading day;
(2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which
the trading price per $1,000 principal amount of Exchangeable Notes for each trading day of the measurement period was less than 98% of
the product of the closing sale price of NIL’s common shares and the applicable exchange rate on such trading day; (3) with
respect to the Exchangeable Notes called (or deemed called) for redemption, at any time prior to the close of business on the second scheduled
trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after December 15,
2028, a holder may exchange all or any portion of its Exchangeable Notes at any time prior to the close of business on the second scheduled
trading day immediately preceding the maturity date, regardless of the foregoing conditions. NII will settle exchanges of the Exchangeable
Notes by paying or causing to be delivered, as the case may be, cash, common shares of NIL or a combination of cash and such common shares,
at its election.
The Exchangeable Notes will be redeemable, in whole or in part, at
NII’s option at any time, and from time to time, on or after June 15, 2026 and on or before the 22nd scheduled trading day
immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus
accrued and unpaid interest to the date of redemption, only if the last reported sale price per share of the common shares exceeds 130%
of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days
ending on, and including, the trading days immediately before the date NII sends the related redemption notice; and (2) the trading
day immediately before the date NII sends such notice. NII may redeem the Exchangeable Notes at its option, in whole but not in part,
if NII or NIL have, or on the next interest payment date would, become obligated to pay to the holder of any Exchangeable Notes additional
amounts as a result of certain tax-related events at a redemption price equal to 100% of the principal amount plus accrued and unpaid
interest, including any additional amounts, if any, to, but excluding, the redemption date.
If a “fundamental change” (as defined
in the Indenture) occurs, subject to certain conditions, holders may require NII to repurchase for cash any or all of their Exchangeable
Notes at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid
interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary dilution provisions as well as adjustment
provisions in connection with exchanges under certain corporate events or a redemption.
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.