SLB 5Y/7Y/10Y USD New Issue: FV +44/+56/+66 vs IPT +85/+95/+105
Schlumberger Investment SA launched a triple-tranche USD senior unsecured benchmark today, fully guaranteed by SLB N.V. and rated A1/A. Initial price talk arrived at UST+85/+95/+105 across the 5Y, 7Y and 10Y points — materially wide of fair value reads of approximately +44/+56/+66 derived from the recent same-sector peer curve. Use of proceeds is refinancing of near-term debt maturities. The deal is expected to clear with substantial tightening from IPT.
Deal snapshot
| Issuer | Schlumberger Investment SA |
| Guarantor | SLB N.V. |
| Ratings | A1 / A |
| Format | SEC registered, senior unsecured |
| Tranches | USD 5Y | USD 7Y | USD 10Y |
| IPTs | UST+85 | UST+95 | UST+105 |
| Use of proceeds | Refinance near-term debt maturities |
| Settlement | T+5 |
| Expected size | USD 2.5–4.5bn combined |
Anchor comp: same-sector benchmark
Fair value is anchored on the recent multi-tranche USD benchmark from a direct oilfield services peer (A3/A-) priced approximately eight weeks ago. Those bonds are liquid, well-distributed and have rallied 7–9bp since launch. The next-closest US peer is referenced as a cross-check but trades on older, lower-rated, low-coupon paper — a less reliable read.
| Peer reference | Tenor | G-spread |
|---|---|---|
| Same-sector A-/A3 peer 2029 | 2.9Y | +41 |
| Same-sector A-/A3 peer 2031 | 5.1Y | +58 |
| Same-sector A-/A3 peer 2033 | 7.1Y | +68 |
| Same-sector A-/A3 peer 2036 | 10.1Y | +81 |
| Cross-check BBB+ peer 2035 (stale, rich) | 9.5Y | +78 |
From peer curve to fair value
Issuer sits 1.5 composite notches above the anchor peer (A1/A vs A3/A-), with an additional franchise premium for the larger and more diversified leader. That maps to a 12–15bp inside-peer basis across the 5–10Y zone in the current low-volatility IG regime.
| Tranche | Peer live | Basis applied | Implied FV |
|---|---|---|---|
| 5Y | +58 | −14 | +44 |
| 7Y | +68 | −12 | +56 |
| 10Y | +81 | −15 | +66 |
Concession at IPT
| Tranche | IPT | FV | NIC at IPT |
|---|---|---|---|
| 5Y | +85 | +44 | ~41 |
| 7Y | +95 | +56 | ~39 |
| 10Y | +105 | +66 | ~39 |
Landing scenarios
A 35–40bp NIC at IPT is multiples of the 5–15bp range typical for high-grade industrial benchmarks in the current regime. Standard tightening from IPT for a name of this quality is 25–35bp. The central case implies a residual concession of 5–15bp at landing across all three tranches.
| Scenario | 5Y | 7Y | 10Y | Residual NIC |
|---|---|---|---|---|
| Conservative | +60 | +70 | +85 | 15–19 |
| Central | +50 | +60 | +75 | 6–9 |
| Aggressive | +47 | +57 | +72 | 3–6 |
| Through-fair tail | +43 | +55 | +68 | 0–2 |
The information contained in this post is provided for informational and educational purposes only. It does not constitute investment advice, an offer to sell or a solicitation to buy any security, and should not be relied upon as the basis of any investment decision. Spread levels, fair value estimates and landing scenarios reflect observations of secondary market conditions at the time of writing and are subject to change without notice. No representation is made as to the accuracy or completeness of any data referenced. Readers should conduct their own analysis or consult a regulated financial adviser before making any investment decision.
