Fitch cuts Valaris notes on tap issue

Fitch Ratings said it downgraded Valaris Ltd.’s and Valaris Finance Co. LLC’s secured second-lien notes due 2030 to B+ from BB- after Valaris decided to place a tap issue.

The tap issue, expected to be $350 million, will reduce the recovery rating to RR4 from RR3, which will bring the rating of the notes on par with Valaris' IDR, Fitch explained.

The incremental debt is mainly needed to fund the final payment for two drillships before the end of 2023.

The agency also affirmed Valaris’ B+ issuer default rating.

The outlook is stable.

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