SIMPSON THACHER & BARTLETT LLP
425 LEXINGTON AVENUE
NEW YORK, N.Y. 10017-3954
(212) 455-2000
----------
FACSIMILE (212) 455-2502
DIRECT DIAL NUMBER E-MAIL ADDRESS
212-455-3189 ETOLLEY@STBLAW.COM
March 3, 2006
VIA FEDERAL EXPRESS AND EDGAR
Re: Dresser-Rand Group Inc. -
Registration Statements on
Form S-1, File No.: 333-131300 and Form
S-4, File No.: 333-131212
Jay Mumford
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Mail Stop 6010
Washington, DC 20549
Dear Mr. Mumford:
On behalf of Dresser-Rand Group Inc. (the "Company"), Dresser-Rand
LLC, Dresser-Rand Power LLC, Dresser-Rand Company, D-R Steam LLC and
Dresser-Rand Global Services, L.L.C. (collectively, the "Registrants") we are
providing the following responses to the comments set forth in the comment
letter of the staff of the Securities and Exchange Commission (the "Staff")
dated February 17, 2006 (the "comment letter") relating to the above-referenced
Registration Statements on Form S-4 filed on January 23, 2006 (the "S-4
Registration Statement") and Form S-1 filed on January 26, 2006 (the "S-1
Registration Statement", and, together with the S-4 Registration Statement, the
"Registration Statements"). We have also revised each of the Registration
Statements in response to the Staff's comments, as applicable, and are filing
concurrently with this letter Amendment No. 1 to the S-1 Registration Statement
and Amendment No. 1 to the S-4 Registration Statement, which reflect these
revisions and generally update financial and other information. The S-1
Registration Statement also has been revised to insert offering size and other
offering-related information.
The additional filing fee for the S-1 Registration Statement in the
amount of $18,528.12 has been deposited by wire transfer of same-day funds to
the Securities and Exchange Commission's account at Mellon Bank.
For your convenience, the numbered paragraphs of this letter
correspond to the numbered paragraphs of the comment letter. Page references in
the text of this letter
Securities and Exchange Commission
March 3, 2006
Page 2
correspond to the pages of the amended Registration Statements. The responses
and information described herein are based upon information provided to us by
the Registrants.
GENERAL
1. All references below prior to our comments refer to those comments that
we issued in our letter to you dated March 11, 2005 concerning your
Form S-4 registration statement originally filed on February 11, 2005
(File No. 333-122757).
The Staff's comment is duly noted.
RISK FACTORS - PAGE 19
2. We note that the disclosure regarding your contacts with countries
identified as terrorist-sponsoring states in the risk factor headed
"Economic, political and other risks associated with international
sales and operations could adversely affect our business." in your S-1
and S-4 filed on January 26, 2006, differs from the disclosure under
the same heading on page 17 of your prospectus filed pursuant to Rule
424(b)(4) on August 8, 2005. The phrases "which may have a material
adverse effect on the valuation of our stock" and "that may have a
material adverse effect on the price of our shares" are not included in
the second paragraph of the current disclosure regarding your contacts
with such countries. Please advise us of the reasons you deleted these
phrases from your disclosure. In this regard, we note that, subsequent
to your Rule 424(b)(4) filing, California and Oregon have also adopted
provisions relating to the investment of state funds in companies that
do business in Sudan, and Dartmouth College has determined not to
invest in specified companies with business ties to Sudan.
The Registrants have revised the disclosure on page 17 of the S-1
Registration Statement and page 29 of the S-4 Registration Statement to
include this language as it was inadvertently omitted from the
Registration Statements.
3. We note your response to our prior comment 5. However, the disclosure
that you provided in your Form S-1 registration statement (File No.
333-124963) in response to such comment does not appear in the summary
of the Form S-4 registration statement. Please provide the applicable
disclosure.
The Registrants have revised the disclosure on page 5 of the S-4
Registration Statement in response to the Staff's comment.
EXECUTIVE COMPENSATION - PAGE 100
4. We note your response to our prior comment 52. Please add compensation
disclosure for the fiscal year just completed.
Securities and Exchange Commission
March 3, 2006
Page 3
The Registrants have revised the disclosure on pages 91, 92 and 93 of
the S-1 Registration Statement and pages 101 and 102 of the S-4
Registration Statement to add compensation disclosure for the 2005
fiscal year.
NO PERSONAL LIABILITY - PAGE 153
5. We note your response to our prior comment 66. Please provide a
detailed legal analysis of how you believe this "consideration for the
issuance of notes" is consistent with the Exxon Capital line of
no-action letters.
After further consideration of the Staff's comment, and after
discussing this comment further with the Staff, the Registrants
continue to believe that the provision at issue is not inconsistent
with the Exxon Capital line of no-action letters. First, the
Registrants continue to believe that this provision is not a material
provision of the indenture and that few sophisticated investors that
purchase these types of securities concern themselves with this
provision. Indeed, counsel to the Registrants knows of no situation
where an investor has commented on the provision, whereas the investors
that purchase these types of securities routinely comment on the
restrictive covenants and the various exceptions thereto. We believe
that this is so since it is very clear that the parties referenced in
the waiver provision are not obligors of the securities at issue.
Accordingly, the Registrants strongly believe that this provision
should have no bearing on whether the Registrants are permitted to do
an Exxon Capital exchange. As part of this analysis, because we believe
the provision is so immaterial, the Registrants find it difficult to
assign any material amount of consideration to it such that the
security might be viewed as having been sold with part cash/part
non-cash consideration. Even if it were so viewed, the Registrants do
not see anything in Exxon Capital that would preclude such security
from being exchanged according to the procedures set forth in those
letters. This is so since the Exxon Capital letters concern themselves
principally with procedures, as opposed to the underlying substance of
provisions in the indenture or preferred stock referenced in those
letters. The Registrants understand that the basic principles of the
Exxon Capital letters are that (i) tendering holders are not
affiliates; (ii) tendering holders are acquiring the exchange
securities in the ordinary course of their business; (iii) tendering
holders have no arrangements or understandings with the issuer to
participate in the distribution of the exchange securities; and (iv)
among other related items, that broker-dealers may participate in the
exchange offer as part of ordinary market making activities so long as
they deliver a prospectus. The Registrants do not believe that the
Exxon Capital letters focus on any substantive provisions of the
underlying indenture and can find nothing in such letters that would
result in a changed conclusion due to the inclusion or exclusion of the
waiver provision at issue. Following up on the discussion counsel had
with the Staff, the Registrants also believe that the
waiver/consideration provision is a standard "boilerplate" provision
that is included in most indentures, regardless of whether the
Securities and Exchange Commission
March 3, 2006
Page 4
underlying security is guaranteed or not guaranteed by subsidiaries
and/or parent entities. Finally, the Registrants note that the
provision at issue is included in the indenture, which governs both the
outstanding securities and the exchange securities and that the
disclosure of the provision was included in the original offering
document and is included in the S-4 Registration Statement.
Accordingly, the Registrants do not believe that this issue raises the
same concerns that the Staff has raised recently when the structure or
obligor changes pre- versus post-exchange offer. As you requested,
counsel to the Registrants have consulted its bankruptcy experts who
see no reason why such a provision would not be enforced by a
bankruptcy judge or court.
NOTE 24, SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION, PAGE F-45 AND F-67
6. We note your response to our prior comment 83. Please clarify which
subsidiaries are non-guarantors.
The Registrants have revised the disclosures on pages F-45, F-46, F-68
and F-69 of each of the Registration Statements to include a list of
the subsidiaries that do not guarantee the notes.
* * * *
Please call me (212-455-3189) or Lori E. Scher (212-455-2447) of my
firm if you wish to discuss our responses to the comment letter.
Very truly yours,
/s/ Edward P. Tolley III
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Edward P. Tolley III