Borr Drilling Limited – Announces Pricing of Additional Senior Secured Notes Offering

Borr Drilling said its subsidiary priced approximately $165 million of additional 10.375% senior secured notes due 2030, on the same terms as its existing 2030 notes, with settlement expected on or about December 19, 2025 subject to customary closing conditions. The company intends to use the proceeds, together with a previously announced equity offering, seller financing and available cash, to fund the recently announced acquisition of five premium jack-up rigs and for general corporate purposes including debt service, capital expenditures, working capital and potential M&A; the securities are not registered under the U.S. Securities Act and are not being offered to U.S. persons.

Analysis

Borr Drilling priced approximately $165 million of additional 10.375% senior secured notes due 2030 through subsidiary Borr IHC Limited, stating the Additional Notes carry identical terms to its existing 2030 notes and are expected to settle on or about December 19, 2025 subject to customary closing conditions. The company intends to combine these proceeds with a previously announced equity offering, seller financing and available cash to fund the December 8, 2025 announcement to acquire five premium jack-up rigs and for general corporate purposes including debt service, capital expenditures, working capital and potential M&A. The 10.375% coupon signals a relatively high cost of debt and will increase interest expense and leverage absent immediate cashflow contribution from the acquired rigs; the senior secured ranking provides partial creditor protection but does not eliminate elevated funding costs. The securities are not registered under the U.S. Securities Act and are not being offered to U.S. persons, which constrains the investor base and may limit liquidity; the company’s forward-looking statements note closing and integration risks and expressly caution reliance on the projections, so monitoring pro forma leverage, closing outcomes and rig utilization will be critical.

Key Decisions for Investors

• Assess pro forma leverage and interest coverage assuming the $165m bond issuance and any equity dilution before adding or increasing positions in BORR
• If considering the new notes, value the 10.375% coupon against collateral quality and covenant terms given senior secured status and potential liquidity constraints
• Monitor settlement around December 19, 2025 and confirm closing conditions and receipt of proceeds before changing exposure, since the offering is subject to customary closing conditions
• Account for dilution risk from the concurrent equity offering and watch operational metrics from the five jack-up rigs (utilization, dayrates) as evidence the acquisition can service incremental debt
• U.S.-based investors should note the securities are not registered for U.S. persons, which may affect marketability and secondary liquidity