Borr Drilling to price $1.5 billion five- and seven-year secured notes on Tuesday

By Paul A. Harris

Portland, Ore., Oct. 23 – Borr Drilling plans to sell $1.5 billion of Borr IHC Ltd./Borr Finance LLC senior secured notes (expected B3/confirmed BB-/confirmed B) in two tranches on Tuesday, according to a syndicate source.

The Rule 144A and Regulation S for life offer comes in tranches of five-year notes, which become callable after two years at par plus 50% of the coupon. A $75 million amount of the notes amortize annually at 105, fixed for the life of the bond.

The deal also includes a tranche of eight-year notes, which become callable after three years at par plus 50% of the coupon. A $25 million amount of the eight-year notes amortizes annually at 105, fixed for the life of the bond.

The bonds in both tranches feature excess cash flow provisions, which specify annual offers to bondholders at 105, starting in 2025, for 75% of excess cash flow if consolidated total net leverage is above three-times, stepping down to 50% if leverage is above two-times and down to 25% if leverage is above 1.5-times.

Goldman Sachs International is the left bookrunner. DNB, Citigroup, Clarksons, Fearnley and Pareto are the joint bookrunners.

Proceeds plus new equity will be used to pay off all secured debt under the DNB facility, the Hayfin facility, the shipyard delivery financing arrangements with Offshore Partners Pte. Ltd. and PPL Shipyard Pte Ltd., the 9½% senior secured bonds due February 2026, with the remainder, if any, to be used for general corporate purposes.

Borr Drilling is a hydrocarbon drilling contractor based in Hamilton, Bermuda.

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