Fitch assigns Borr B

Fitch Ratings said it assigned Borr Drilling Ltd. a first-time long-term issuer default rating of B with a stable outlook. The agency also assigned the upcoming notes to be issued by Borr IHC Ltd. and Borr Finance LLC an expected B senior secured rating. The recovery rating is RR4. Borr Drilling will guarantee the notes.

“Borr's IDR reflects its strong near-term revenue visibility from a robust contracted order backlog, its high-spec jack-up fleet and its strong relationship with key customers, which is partially offset by exposure to Petroleos Mexicanos (Pemex) (B+/rating watch negative). The rating further reflects high leverage with a strong deleveraging trajectory from 2024 and a new capital structure that we expect to consist mostly of amortizing debt.

“Borr's IDR also incorporates a moderate scale, concentrated rig fleet of only jack-up rigs and the inherent cyclicality of the offshore drilling market,” the agency said in a press release.

Fitch noted Borr's 2Q23 backlog was $1.9 billion. Of this, $805 million is set to be counted as revenue in 2024 and $634 million in 2025, covering around 86% and 62%, respectively.

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