Borr Drilling (BORR) Extends Debt Maturity Profile and Lowers Total Outstanding Debt

Borr Drilling Ltd. (NYSE:BORR) is one of the 15 best NYSE penny stocks to buy according to hedge funds.

On July 2, Borr Drilling Ltd. (NYSE:BORR) announced the completion of a debt refinancing transaction that extended the company's debt maturity profile and also lowered its cumulative debt outstanding. As a considerable offshore drilling entity with substantial financial requirements, a well-crafted loan portfolio is imperative to fund fleet operations and meet contract obligations. This has helped investors gain a clearer picture of the company's financial position.

The tender offer and redemption, which has now closed, takes out a substantial amount of debt due in 2028 and 2030, and replaces it with longer-dated notes, after the previous issuance of US$2.035 billion. The refinancing eases the pressure of near-term maturity, but the overall debt remains large.

The company's interest cost will now be linked to the new notes. Together with the already issued US$300 million convertible notes and the recent insider purchases by one of the Directors, Tor Troim, these underscore management's intent to bolster the balance sheet while allowing for the expansion of its fleet of jack-up rigs.

Earlier, on July 1, Capital One initiated coverage of the stock with a target price of $6, implying upside potential of more than 37%. The firm also assigned an Overweight rating to the stock.

Borr Drilling Ltd. (NYSE:BORR) provides offshore shallow-water drilling services to the oil and gas sector. It operates jackup rigs for carrying out shallow-water drilling and workover activities for its customers engaged in the exploration or production of oil and gas.

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