Valaris starts consent solicitation for secured first-lien notes due 2028

By Mary-Katherine Stinson

Lexington, Ky., Aug. 15 – Valaris Ltd. launched a brief consent solicitation for its outstanding $549,845,000 senior secured first-lien notes due 2028 (Cusips: G9460GAA9, 91889FAA9, G9460GAB7, 91889FAB7), according to a press release Monday.

Valaris is seeking consent to amend the indenture governing the notes to implement a customary net income builder basket for restricted payments, increase the restricted payments general basket to $175 million from $100 million and make other incremental changes to the company’s restricted payments capacity and increase the general basket for investments to the greater of $175 million and 6.5% of total assets from the greater of $100 million and 4% of total assets.

The offer expires at 5 p.m. ET on Aug. 19.

The total consent fee will be $2,749,225 to be shared by all consenting holders who validly deliver consents prior to the expiration date.

Specifically, the consent fee for each holder will be calculated using an amount, per $1,000 principal amount of notes for which a holder validly delivers a consent prior to the expiration, equal to the product of $5 multiplied by a fraction, the numerator of which is the total principal amount outstanding as of the expiration date and the denominator of which is the total principal amount of notes for which the holders have validly delivered consents prior to the expiration date.

As a result, the consent fee for the notes will range from $5 per $1,000 (if all holders consent) to approximately $10 per $1,000 (if holders of only a majority of the total principal amount of the notes consent).

Holders of at least a majority of the notes must consent for the proposed amendments to be effective through a supplemental indenture. The proposed amendments will not become operational until the consent fee is paid.

Consents are irrevocable once the supplemental indenture is executed which may occur prior to the expiration of the offer.

Valaris stated the proposed amendments are intended to provide greater and more customary flexibility over time, while continuing to provide noteholders with ample collateral coverage.

The notes were originally issued as part of the company’s exit financing from a Chapter 11 bankruptcy.

Deutsche Bank Securities Inc. (855 287-1922, 212 250-7527).is the sole solicitation agent and Global Bondholder Services Corp. (212 430-3774, 855 654-2015, contact@gbsc-usa.com) will act as the information and tabulation agent in connection with the consent solicitation.

Valaris is a Bermuda-based offshore drilling company.

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