S&P boosts Shelf Drilling

S&P said it raised its ratings on Shelf Drilling Holdings Ltd. and the $310 million and $900 million legacy notes to B- from CCC+. The agency also assigned a B- rating to its priced $1.095 billion of senior secured notes. Finally, S&P removed Shelf’s issuer rating from CreditWatch with positive implications where it was placed on Sept. 26. The outlook is stable.

“Our upgrade of Shelf Drilling follows the company's successful pricing of $1.095 billion of senior secured notes and execution of other instruments that support its liquidity. Shelf Drilling successfully priced $1.095 billion senior secured notes, conducted a private placement of about $60 million of equity and secured a $125 million revolving credit facility (RCF) and $50 million term loan. These transactions will help strengthen the company's liquidity and push most debt maturities to 2029.

“We further expect the remaining $250 million bond issued at Shelf Drilling North Sea, maturing in October 2025, will not pressure liquidity, given the available RCF and improving cash generation on the back of higher day rates. The proceeds of the new notes will be used to repay Shelf's outstanding $310 million and $900 million notes over the coming weeks,” S&P said in a press release.

The stable outlook reflects the view on Shelf’s $2.6 billion backlog, improving day rates and use, the agency said.

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