Valaris Limited Announces $600 Million Private Placement of Senior Secured Second Lien Notes Due 2030 and Issues Notice of Conditional Full Redemption for its Senior Secured First Lien Notes Due 2028

Rhea-AI Summary

Valaris Limited (NYSE: VAL) announced it plans to offer $600 million in senior secured second lien notes due 2030 to eligible purchasers. The proceeds will be used to redeem all outstanding first lien notes due 2028 at a price of 104% of their principal amount, with a redemption date of May 3, 2023. The offering is contingent upon market conditions and the completion of the $600 million offering. Additionally, Valaris entered a credit agreement for up to $375 million, which will be secured by the same assets. These moves indicate a strategic approach to manage debt and optimize financial health.

Positive

• Plans to offer $600 million in senior secured second lien notes to improve capital structure.
• Intends to redeem outstanding first lien notes at a premium, signaling strong financial management.
• New credit agreement allows borrowing of up to $375 million, enhancing liquidity.

Negative

• None.

HAMILTON, Bermuda--(BUSINESS WIRE)-- Valaris Limited (NYSE: VAL) (“Valaris”) and its wholly-owned subsidiary, Valaris Finance Company LLC, announced today that, subject to market conditions, they intend to offer (the “Offering”) for sale to eligible purchasers in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”), $600 million in aggregate principal amount of senior secured second lien notes due 2030 (the “Second Lien Notes”). Valaris intends to use the net proceeds from the Offering to fund the redemption of all of its outstanding Senior Secured First Lien Notes due 2028 (the “First Lien Notes”) and for general corporate purposes.

Valaris also announced today that it has delivered a notice of conditional redemption for all of the First Lien Notes at a redemption price equal to 104.00% of the principal amount of the First Lien Notes, plus accrued and unpaid interest to, but not including, the redemption date (the “Redemption Price”). The redemption date for the First Lien Notes provided in the notice of conditional full redemption is May 3, 2023 (the “Redemption Date”). Valaris’ obligation to redeem the First Lien Notes and pay the Redemption Price is conditioned upon the completion of an offering by Valaris and Valaris Finance Company LLC of at least $600 million aggregate principal amount of their senior debt securities on or before the Redemption Date. Valaris may waive this condition at its sole discretion. Valaris will publicly announce and notify the holders of the First Lien Notes and the Trustee (as defined below) if the foregoing condition is not satisfied or waived, whereupon the redemption will be revoked and the First Lien Notes will remain outstanding. Wilmington Savings Fund Society, FSB is the trustee (the “Trustee”) for the First Lien Notes and is serving as the paying agent for the redemption.

The securities to be offered have not been registered under the Securities Act, or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Valaris plans to offer and sell the securities only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act.

In addition, on April 3, 2023, Valaris entered into a senior secured five-year credit agreement (the “Credit Agreement”), which provides for commitments permitting borrowings of up to $375 million. The Credit Agreement will be (i) guaranteed by the same subsidiaries that guarantee the Second Lien Notes and by Valaris Finance Company LLC and (ii) secured on a first lien basis by the same assets that secure the Second Lien Notes. The commitments under the Credit Agreement will become available to be borrowed upon the satisfaction of various conditions, including the consummation of the Offering and the redemption or discharge of all of the First Lien Notes. The Offering is cross-conditioned upon the occurrence of such availability substantially concurrently with the closing.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any of these securities, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Valaris Limited

Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company.

Cautionary Statements Regarding Forward-Looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding the Offering and the use of proceeds therefrom, the conditional redemption of the First Lien Notes and the Credit Agreement. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated. For additional information regarding known material risks, you should also carefully read and consider Valaris’ most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission’s website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and Valaris undertakes no obligation to update or revise any forward-looking statements, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230402005068/en/

Investor & Media Contacts:

Darin Gibbins

Vice President - Investor Relations and Treasurer

+1-713-979-4623

Tim Richardson

Director - Investor Relations

+1-713-979-4619

Source: Valaris Limited

FAQ

What is Valaris Limited's recent announcement regarding senior secured second lien notes?

Valaris Limited announced plans to offer $600 million in senior secured second lien notes due 2030, intended to fund the redemption of first lien notes.

What will Valaris do with the proceeds from the note offering?

The net proceeds from the offering will be used to redeem all outstanding first lien notes due 2028 and for general corporate purposes.

When is the redemption date for Valaris' first lien notes?

The redemption date for the first lien notes is set for May 3, 2023.

What is the significance of Valaris entering a credit agreement for $375 million?

The credit agreement allows Valaris to enhance its liquidity and is tied to the completion of the note offering.

What is the redemption price for the first lien notes?

The redemption price for the first lien notes is 104% of the principal amount plus accrued interest.