Borr Drilling issues $260 million in convertible notes to buy back older debt & restructure its finances.
Borr Drilling Limited recently announced a strategic financial restructuring move. The firm priced $260 million in senior convertible notes. These unsecured obligations will mature in May 2033. Consequently, qualified institutional buyers will purchase them privately. Furthermore, the company granted a $40 million overallotment option. The offering should officially close on April 17, 2026. Customary closing conditions naturally apply to this transaction.
The business plans to utilise these proceeds efficiently. Chiefly, executives want to repurchase existing bonds due in 2028. Therefore, the firm will buy back $195.2 million of debt. They will pay $224.5 million to cover accrued interest. Any remaining funds will support general corporate operations. This decisive manoeuvre effectively extends their debt maturity profile.
Investors will earn a 3.5% annual interest rate. The firm pays this semi-annually starting in November 2026. Moreover, buyers can convert these notes into common shares. The initial conversion rate equals 125 shares per $1,000. Consequently, this sets an initial share conversion price of $8.00. The company retains the right to redeem notes early.
This specific redemption option activates after May 2030. However, specific share price targets must be met first. Additionally, fundamental corporate changes allow holders to demand cash. The firm noted that bondholders might adjust hedge positions. Investors could purchase common shares or alter derivative contracts. Therefore, such market activity might boost the share price. Company officials stated they cannot predict the market impact.
(Source: PR Newswire)
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