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Debt | 12 Months Ended
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Dec. 31, 2019
Debt |
Debt | Note 10—Debt Overview Outstanding debt—The aggregate principal amounts and aggregate carrying amounts, net of debt-related balances, including unamortized discounts, premiums, issue costs and fair value adjustments of our debt, were as follows (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Principal amount | ​ | ​ | Carrying amount |
​ | ​ | December 31, | ​ | December 31, |  | ​ | December 31, | ​ | December 31, |
​ |  | 2019 |  | 2018 |  |  | 2019 |  | 2018 |
6.50% Senior Notes due November 2020 (a) | ​ | $ | 206 | ​ | $ | 286 | ​ | ​ | $ | 206 | ​ | $ | 288 | ​
6.375% Senior Notes due December 2021 (a) | ​ | ​ | 222 | ​ | ​ | 328 | ​ | ​ | ​ | 221 | ​ | ​ | 327 | ​
5.52% Senior Secured Notes due May 2022 (b) | ​ | ​ | 200 | ​ | ​ | 282 | ​ | ​ | ​ | 198 | ​ | ​ | 280 | ​
3.80% Senior Notes due October 2022 (a) | ​ | ​ | 190 | ​ | ​ | 411 | ​ | ​ | ​ | 189 | ​ | ​ | 408 | ​
0.50% Exchangeable Bonds due January 2023 (a) | ​ | ​ | 863 | ​ | ​ | 863 | ​ | ​ | ​ | 862 | ​ | ​ | 862 | ​
5.375% Senior Secured Notes due May 2023 (d) | ​ | ​ | 525 | ​ | ​ | — | ​ | ​ | ​ | 518 | ​ | ​ | — | ​
9.00% Senior Notes due July 2023 (c) | ​ | ​ | 714 | ​ | ​ | 1,250 | ​ | ​ | ​ | 701 | ​ | ​ | 1,221 | ​
5.875% Senior Secured Notes due January 2024 (d) | ​ | ​ | 667 | ​ | ​ | 750 | ​ | ​ | ​ | 656 | ​ | ​ | 735 | ​
7.75% Senior Secured Notes due October 2024 (d) | ​ | ​ | 420 | ​ | ​ | 480 | ​ | ​ | ​ | 412 | ​ | ​ | 469 | ​
6.25% Senior Secured Notes due December 2024 (d) | ​ | ​ | 437 | ​ | ​ | 500 | ​ | ​ | ​ | 430 | ​ | ​ | 489 | ​
6.125% Senior Secured Notes due August 2025 (d) | ​ | ​ | 534 | ​ | ​ | 600 | ​ | ​ | ​ | 525 | ​ | ​ | 588 | ​
7.25% Senior Notes due November 2025 (c) | ​ | ​ | 750 | ​ | ​ | 750 | ​ | ​ | ​ | 737 | ​ | ​ | 736 | ​
7.50% Senior Notes due January 2026 (c) | ​ | ​ | 750 | ​ | ​ | 750 | ​ | ​ | ​ | 743 | ​ | ​ | 742 | ​
6.875% Senior Secured Notes due February 2027 (d) | ​ | ​ | 550 | ​ | ​ | — | ​ | ​ | ​ | 541 | ​ | ​ | — | ​
7.45% Notes due April 2027 (a) | ​ | ​ | 88 | ​ | ​ | 88 | ​ | ​ | ​ | 86 | ​ | ​ | 86 | ​
8.00% Debentures due April 2027 (a) | ​ | ​ | 57 | ​ | ​ | 57 | ​ | ​ | ​ | 57 | ​ | ​ | 57 | ​
7.00% Notes due June 2028 (e) | ​ | ​ | 300 | ​ | ​ | 300 | ​ | ​ | ​ | 306 | ​ | ​ | 306 | ​
Finance lease contract due August 2029 | ​ | ​ | — | ​ | ​ | 511 | ​ | ​ | ​ | — | ​ | ​ | 511 | ​
7.50% Notes due April 2031 (a) | ​ | ​ | 588 | ​ | ​ | 588 | ​ | ​ | ​ | 585 | ​ | ​ | 585 | ​
6.80% Senior Notes due March 2038 (a) | ​ | ​ | 1,000 | ​ | ​ | 1,000 | ​ | ​ | ​ | 991 | ​ | ​ | 991 | ​
7.35% Senior Notes due December 2041 (a) | ​ | ​ | 300 | ​ | ​ | 300 | ​ | ​ | ​ | 297 | ​ | ​ | 297 | ​
Total debt | ​ | ​ | 9,361 | ​ | ​ | 10,094 | ​ | ​ | ​ | 9,261 | ​ | ​ | 9,978 | ​
Less debt due within one year | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
6.50% Senior Notes due November 2020 (a) | ​ | ​ | 206 | ​ | ​ | — | ​ | ​ | ​ | 206 | ​ | ​ | — | ​
5.52% Senior Secured Notes due May 2022 (b) | ​ | ​ | 88 | ​ | ​ | 83 | ​ | ​ | ​ | 87 | ​ | ​ | 81 | ​
5.375% Senior Secured Notes due May 2023 (d) | ​ | ​ | 16 | ​ | ​ | — | ​ | ​ | ​ | 14 | ​ | ​ | — | ​
5.875% Senior Secured Notes due January 2024 (d) | ​ | ​ | 83 | ​ | ​ | 83 | ​ | ​ | ​ | 79 | ​ | ​ | 79 | ​
7.75% Senior Secured Notes due October 2024 (d) | ​ | ​ | 60 | ​ | ​ | 60 | ​ | ​ | ​ | 58 | ​ | ​ | 58 | ​
6.25% Senior Secured Notes due December 2024 (d) | ​ | ​ | 62 | ​ | ​ | 62 | ​ | ​ | ​ | 60 | ​ | ​ | 60 | ​
6.125% Senior Secured Notes due August 2025 (d) | ​ | ​ | 66 | ​ | ​ | 66 | ​ | ​ | ​ | 64 | ​ | ​ | 63 | ​
Finance lease contract due August 2029 | ​ | ​ | — | ​ | ​ | 32 | ​ | ​ | ​ | — | ​ | ​ | 32 | ​
Total debt due within one year | ​ | ​ | 581 | ​ | ​ | 386 | ​ | ​ | ​ | 568 | ​ | ​ | 373 | ​
Total long-term debt |  | $ | 8,780 | ​ | $ | 9,708 | ​ |  | $ | 8,693 | ​ | $ | 9,605 | ​
(a) | Transocean Inc., a 100 percent owned direct subsidiary of Transocean Ltd., is the issuer of the notes and debentures. Transocean Ltd. has provided a full and unconditional guarantee of the notes and debentures. Transocean Ltd. has no independent assets or operations, and its other subsidiaries not owned indirectly through Transocean Inc. were minor. Transocean Inc. has no independent assets and operations, other than those related to its investments in non-guarantor operating companies and balances primarily pertaining to its cash and cash equivalents and debt. Except as discussed under “Indentures,” Transocean Ltd. and Transocean Inc. are not subject to any significant restrictions on their ability to obtain funds from their consolidated subsidiaries by dividends, loans or capital distributions.
(b) | The subsidiary issuer of the unregistered senior secured notes is a wholly owned indirect subsidiary of Transocean Inc. The senior secured notes are fully and unconditionally guaranteed by the owner of the collateral rig. See “—Debt issuances—Senior secured notes.”
(c) | Transocean Inc. is the issuer of the unregistered notes. The priority guaranteed senior unsecured notes, which rank equal in right of payment of all of our existing and future unsecured unsubordinated obligations and rank structurally senior to the extent of the value of the assets of the subsidiaries guaranteeing the notes, are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd. and certain wholly owned subsidiaries of Transocean Inc. See “—Debt issuances—Priority guaranteed senior unsecured notes.”
(d) | Each subsidiary issuer of the respective unregistered senior secured notes is a wholly owned indirect subsidiary of Transocean Inc. The senior secured notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd., Transocean Inc. and, in each case, the owner of the respective collateral rig or rigs. See “—Debt issuances—Senior secured notes.”
(e) | The subsidiary issuer of the registered notes is a wholly owned indirect subsidiary of Transocean Inc. Transocean Inc. has provided a full and unconditional guarantee of the notes and debentures.
​ See Note 23—Subsequent Events. Scheduled maturities—At December 31, 2019, the scheduled maturities of our debt were as follows (in millions): ​
​ | ​ | ​ | ​ | ​
​ |  | Total |
Years ending December 31, | ​ | ​ | ​ | ​
2020 | ​ | $ | 581 | ​
2021 | ​ | ​ | 633 | ​
2022 | ​ | ​ | 610 | ​
2023 | ​ | ​ | 2,316 | ​
2024 | ​ | ​ | 854 | ​
Thereafter | ​ | ​ | 4,367 | ​
Total principal amount of debt | ​ | ​ | 9,361 | ​
Total debt-related balances, net | ​ | ​ | (100) | ​
Total carrying amount of debt | ​ | $ | 9,261 | ​
​ Indentures—The indentures that govern our debt generally contain covenants that, among other things, limit our ability to incur certain liens on our drilling units without equally and ratably securing the notes, to engage in certain sale and lease back transactions covering any of our drilling units, to allow our subsidiaries to incur certain additional debt, or to engage in certain merger, consolidation or reorganization transactions or to enter into a scheme of arrangement qualifying as an amalgamation. Additionally, the indentures that govern the 5.52% senior secured notes due May 2022 (the “5.52% Senior Secured Notes”), the 5.375% Senior Secured Notes due May 2023 (the “5.375% Senior Secured Notes”), the 5.875% senior secured notes due January 2024 (the “5.875% Senior Secured Notes”), the 7.75% senior secured notes due October 2024, the 6.25% senior secured notes due December 2024, the 6.125% senior secured notes due August 2025 (the “6.125% Senior Secured Notes”) and the 6.875% senior secured notes due February 2027 (the “6.875% Senior Secured Notes”) contain covenants that limit the ability of our subsidiaries that own or operate the collateral rigs to declare or pay dividends to their affiliates. Interest rate adjustments—The interest rates for certain of our notes are subject to adjustment from time to time upon a change to the credit rating of our non-credit enhanced senior unsecured long-term debt. At December 31, 2019, the interest rate in effect for the 6.375% senior notes due December 2021, the 3.80% senior notes due October 2022 and the 7.35% senior notes due December 2041 was 8.375 percent, 5.80 percent and 9.35 percent, respectively. Secured Credit Facility—In June 2018, we entered into a bank credit agreement, which established a $1.0 billion secured revolving credit facility (the “Secured Credit Facility”), and in May, July, September and December 2019, we amended the terms of the Secured Credit Facility to, among other changes, increase the borrowing capacity to $1.3 billion and add to and clarify the lender parties and their respective commitments under the facility. The Secured Credit Facility is scheduled to expire on the earlier of (i) June 22, 2023 and (ii) if greater than $300 million aggregate principal amount of our 9.00% senior notes due July 2023 (the “9.00% Senior Notes”) remain outstanding in April 2023, such date. The Secured Credit Facility is guaranteed by Transocean Ltd. and certain wholly owned subsidiaries. The Secured Credit Facility is secured by, among other things, a lien on the ultra-deepwater floaters Deepwater Asgard, Deepwater Invictus, Deepwater Orion, Deepwater Skyros, Dhirubhai Deepwater KG2 and Discoverer Inspiration and the harsh environment floaters Transocean Barents and Transocean Spitsbergen, the aggregate carrying amount of which was $4.4 billion at December 31, 2019. The Secured Credit Facility contains covenants that, among other things, include maintenance of certain guarantee and collateral coverage ratios, a maximum debt to capitalization ratio of 0.60 to 1.00 and minimum liquidity of $500 million. The Secured Credit Facility also restricts the ability of Transocean Ltd. and certain of our subsidiaries to, among other things, merge, consolidate or otherwise make changes to the corporate structure, incur liens, incur additional indebtedness, enter into transactions with affiliates and pay dividends and other distributions. We may borrow under the Secured Credit Facility at either (1) the reserve adjusted London interbank offered rate plus a margin (the “Secured Credit Facility Margin”), which ranges from 2.625 percent to 3.375 percent based on the credit rating of the Secured Credit Facility, or (2) the base rate specified in the credit agreement plus the Secured Credit Facility Margin, minus one percent per annum. Throughout the term of the Secured Credit Facility, we pay a facility fee on the amount of the underlying commitment which ranges from 0.375 percent to 1.00 percent based on the credit rating of the Secured Credit Facility. At December 31, 2019, based on the credit rating of the Secured Credit Facility on that date, the Secured Credit Facility Margin was 2.875 percent and the facility fee was 0.625 percent. At December 31, 2019, we had no borrowings outstanding, $13 million of letters of credit issued, and we had $1.3 billion of available borrowing capacity under the Secured Credit Facility. Debt issuances Priority guaranteed senior unsecured notes—On October 25, 2018, we issued $750 million aggregate principal amount of 7.25% senior unsecured notes due November 2025 (the “7.25% Senior Notes”), and we received aggregate cash proceeds of $735 million, net of issue costs. We may redeem all or a portion of the 7.25% Senior Notes on or prior to November 1, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices. On October 17, 2017, we completed an offering of an aggregate principal amount of $750 million of 7.50% senior unsecured notes due January 15, 2026 (the “7.50% Senior Notes”), and we received aggregate cash proceeds of $742 million, net of issue costs. We may redeem all or a portion of the 7.50% Senior Notes on or prior to January 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices. Senior secured notes—On February 1, 2019, we issued $550 million aggregate principal amount of 6.875% Senior Secured Notes, and we received approximately $539 million aggregate cash proceeds, net of discount and issue costs. The 6.875% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Poseidon and the equity of the wholly owned subsidiaries that own or operate the collateral rig. Additionally, we were required to deposit $19 million in restricted cash accounts to satisfy debt service requirements. We are required to pay semiannual installments of (a) interest only through August 2021 and (b) principal and interest thereafter. We may redeem all or a portion of the 6.875% Senior Secured Notes on or prior to February 1, 2022 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices. On May 24, 2019, we issued $525 million aggregate principal amount of 5.375% Senior Secured Notes, and we received approximately $517 million aggregate cash proceeds, net of discount and issue costs. The 5.375% Senior Secured Notes are secured by the assets and earnings associated with the harsh environment floaters Transocean Endurance and Transocean Equinox and the equity of the wholly owned subsidiaries that own or operate the collateral rigs. Additionally, we were required to deposit $14 million in restricted cash accounts to satisfy debt service requirements. We are required to pay semiannual installments of (a) interest only through May 2020 and (b) principal and interest thereafter. We may redeem all or a portion of the 5.375% Senior Secured Notes on or prior to May 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices. In July 2018, we issued $750 million aggregate principal amount of 5.875% Senior Secured Notes and $600 million aggregate principal amount of 6.125% Senior Secured Notes, and we received aggregate cash proceeds of $733 million and $586 million, respectively, net of discount and issue costs. The 5.875% Senior Secured Notes are secured by the assets and earnings associated with the harsh environment floaters Transocean Enabler and Transocean Encourage and the equity of the wholly owned subsidiaries that own or operate the collateral rigs. The 6.125% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Pontus and the equity of the wholly owned subsidiaries that own or operate the collateral rig. Additionally, we were required to deposit $63 million with respect to the 5.875% Senior Secured Notes, and $51 million with respect to the 6.125% Senior Secured Notes, in restricted cash accounts to satisfy debt service and reserve requirements. We are required to pay semiannual installments of principal and interest. We may redeem all or a portion of the 5.875% Senior Secured Notes or the 6.125% Senior Secured Notes on or prior to July 15, 2021 or August 1, 2021, respectively, at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices. On May 5, 2017, we issued $410 million aggregate principal amount of 5.52% Senior Secured Notes, and we received aggregate cash proceeds of $403 million, net of issue costs. The 5.52% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Conqueror, the equity of the wholly owned subsidiaries that own and operate the collateral rig, and certain related assets. We are required to pay quarterly installments of principal and interest on the 5.52% Senior Secured Notes. We may redeem all or a portion of the 5.52% Senior Secured Notes on or prior to December 31, 2021 at a price equal to 100 percent of the aggregate principal amount plus, subject to certain exceptions, a make-whole amount. At December 31, 2019 and 2018, we had an aggregate amount of $386 million and $347 million, respectively, deposited in restricted cash accounts to satisfy debt service and working capital requirements for the senior secured notes. At December 31, 2019, the aggregate carrying amount of rigs encumbered for the senior secured notes, including Deepwater Conqueror, Deepwater Pontus, Deepwater Proteus, Deepwater Thalassa, Deepwater Poseidon, Transocean Enabler, Transocean Encourage, Transocean Endurance and Transocean Equinox, was $6.3 billion. At December 31, 2018, the aggregate carrying amount of rigs encumbered for the senior secured notes, including Deepwater Conqueror, Deepwater Pontus, Deepwater Proteus, Deepwater Thalassa, Transocean Enabler and Transocean Encourage, was $4.4 billion. We will be required to redeem the senior secured notes at a price equal to 100 percent of the aggregate principal amount without a make-whole provision, upon the occurrence of certain events related to the respective collateral rigs and the related drilling contracts. Exchangeable bonds—In connection with the Songa acquisition transactions, we issued $863 million aggregate principal amount of Exchangeable Bonds, as partial consideration for the Songa shares and as consideration for refinancing certain Songa indebtedness. The Exchangeable Bonds may be converted at any time prior to the maturity date at an exchange rate of 97.29756 shares per $1,000 note, equivalent to a conversion price of $10.28 per share, subject to adjustment upon the occurrence of certain events. Holders of Exchangeable Bonds may require us to repurchase all or a portion of such holder’s Exchangeable Bonds upon the occurrence of certain events. The aggregate fair value of the Exchangeable Bonds, measured as of the issuance date, was $1.0 billion, which represented a substantial premium of $172 million above par, and we recorded such premium to additional paid-in capital. We estimated the fair value using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments. Debt assumptions and repayments In connection with the Songa acquisition, we assumed the rights and obligations under certain credit agreements, a subscription agreement and bond loan agreements. In the year ended December 31, 2018, we made an aggregate cash payment equivalent to $1.65 billion to repay the debt obligations outstanding under these agreements, and we terminated the underlying agreements. Debt retirements Repurchases and repayments—During the three years ended December 31, 2019, we repurchased in the open market debt securities with aggregate principal amounts as follows (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Years ended December 31, | ​
​ |  | ​ | 2019 |  | ​ | 2018 |  | ​ | 2017 |
2.50% Senior Notes due October 2017 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 62 | ​
6.00% Senior Notes due March 2018 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 354 | ​
7.375% Senior Notes due April 2018 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 83 | ​
6.50% Senior Notes due November 2020 | ​ | ​ | 23 | ​ | ​ | — | ​ | ​ | 15 | ​
6.375% Senior Notes due December 2021 | ​ | ​ | 43 | ​ | ​ | — | ​ | ​ | 10 | ​
3.80% Senior Notes due October 2022 | ​ | ​ | 32 | ​ | ​ | 95 | ​ | ​ | 33 | ​
9.00% Senior Notes due July 2023 | ​ | ​ | 336 | ​ | ​ | — | ​ | ​ | — | ​
Aggregate principal amount retired | ​ | $ | 434 | ​ | $ | 95 | ​ | $ | 557 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Aggregate cash payment | ​ | $ | 449 | ​ | $ | 95 | ​ | $ | 564 | ​
Aggregate net loss | ​ | $ | (23) | ​ | $ | — | ​ | $ | (7) | ​
​ Tender offers—On February 5, 2019, we completed cash tender offers to purchase up to $700 million aggregate principal amount of certain notes (the “2019 Tendered Notes”). On July 11, 2017, we completed cash tender offers to purchase up to $1.5 billion aggregate principal amount of certain notes (the “2017 Tendered Notes”). During the years ended December 31, 2019 and 2017, we received valid tenders from holders of aggregate principal amounts of the 2019 Tendered Notes and 2017 Tendered Notes as follows (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Years ended December 31, | ​
​ |  | 2019 |  | 2017 | ​
2.50% Senior Notes due October 2017 | ​ | $ | — | ​ | $ | 271 | ​
6.00% Senior Notes due March 2018 | ​ | ​ | — | ​ | ​ | 400 | ​
7.375% Senior Notes due April 2018 | ​ | ​ | — | ​ | ​ | 128 | ​
6.50% Senior Notes due November 2020 | ​ | ​ | 57 | ​ | ​ | 207 | ​
6.375% Senior Notes due December 2021 | ​ | ​ | 63 | ​ | ​ | 213 | ​
3.80% Senior Notes due October 2022 | ​ | ​ | 190 | ​ | ​ | — | ​
9.00% Senior Notes due July 2023 | ​ | ​ | 200 | ​ | ​ | — | ​
Aggregate principal amount retired | ​ | $ | 510 | ​ | $ | 1,219 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Aggregate cash payment | ​ | $ | 522 | ​ | $ | 1,269 | ​
Aggregate net loss | ​ | $ | (18) | ​ | $ | (48) | ​
​ Scheduled maturities and installments—In the years ended December 31, 2019, 2018 and 2017, we made cash payments of $354 million, $257 million and $299 million to repay other indebtedness in scheduled installments. On the scheduled maturity date of October 16, 2017, we made a cash payment of $152 million to repay the outstanding 2.50% senior notes due October 2017, at a price equal to the aggregate principal amount.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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