By Paul A. Harris
Portland, Ore., Oct. 24 – Borr Drilling Ltd. upsized its two-part offering of Borr IHC Ltd./Borr Finance LLC senior secured notes (B3/BB-/B) to $1.54 billion from $1.5 billion, and priced the deal on Tuesday, according to market sources.
A $1.025 billion tranche of 10% notes due 2028 priced at 97.5 to yield 11.117%. The coupon came at the tight end of the 10% to 10¼% coupon talk. The issue price came on top of price talk.
A $515 million tranche of 10 3/8% notes due 2030 priced at 97 to yield 11.378%. The coupon came at the tight end of the 10 3/8% to 10 5/8% coupon talk. The price came on top of price talk.
The deal was playing to $3.5 billion of demand across both tranches when price talk circulated on Tuesday morning, according to a trader.
The bonds in both tranches feature excess cash flow sweep 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 3x, stepping down to 50% if leverage is above 2x and down to 25% if leverage is above 1.5x.
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.
The incremental proceeds resulting from the $40 million upsize of the deal will be used to cover the original issue discounts.
Borr Drilling is a hydrocarbon drilling contractor based in Hamilton, Bermuda.
| Issuer: | Borr IHC Ltd./Borr Finance LLC
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| Amount: | $1.54 billion
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| Securities: | Senior secured notes
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| Bookrunners: | Goldman Sachs International (left), DNB, Citigroup, Clarksons, Fearnley, Pareto
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| Trade date: | Oct. 24
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| Settlement date: | Nov. 7
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| Ratings: | Moody’s: B3
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| S&P: BB-
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| Fitch: B
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| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
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| Notes due 2028
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| Amount: | $1.025 billion
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| Maturity: | 2028
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| Coupon: | 10%
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| Price: | 97.5
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| Yield: | 11.117%
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| Call protection: | Two years
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| Talk: | 10% to 10¼% coupon at OID 97.5 to yield 11¼%
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| Seven-year 2030
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| Amount: | $515 million
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| Maturity: | 2030
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| Coupon: | 10 3/8%
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| Price: | 97
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| Yield: | 11.378%
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| Call protection: | Three years
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| Price talk: | 10 3/8% to 10 5/8% coupon at 97
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