Borr Drilling (BORR) Completes $84M Offering, S&P Downgrades to 'B'

Borr Drilling Limited (NYSE:BORR) is one of the best NYSE stocks under $5 to buy. On December 10, Borr Drilling Limited (NYSE:BORR) settled its public offering of 21 million common shares, which it priced at $4 each. The settlement delivered the full 84 million, and the company has earmarked the net proceeds for the rig purchase and general corporate needs.

In a separate update, on December 9, the company received a credit rating downgrade from S&P Global Ratings to ‘B’ with a stable outlook. This action also included lowering the rating on the company’s senior secured notes to ‘B+’. According to S&P, the downgrade was triggered by Borr’s agreement to acquire five premium jack-up rigs from Noble Corporation PLC for $360 million.

The $84 million from the public offering was used to fund this acquisition. And it was supplemented by a $165 million issuance of senior secured notes at 10.375% interest due in 2030. The company also relied on seller financing and cash reserves. And after the acquisition, Borr’s net debt stands at around $2 billion. S&P projects the debt-to-EBITDA ratio to stay high at 4.5x to 5.0x through 2025-2026, which will hinder efforts to improve financial flexibility amid volatile oil prices.

Borr Drilling Limited (NYSE:BORR) is an international drilling contractor that owns and operates a modern fleet of jack-up rigs used for shallow-water exploration and production. Its operations span offshore regions including the Americas, Europe, Africa, and Asia.

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Disclosure: None. This article is originally published at Insider Monkey.