Fitch assigns Seadrill B+

Fitch Ratings said it assigned a B+ first-time long-term issuer default rating to Seadrill Ltd. and Seadrill Finance Ltd. with a stable outlook. The agency also assigned BB+/RR1 ratings to the planned senior secured first-lien revolving credit facility and BB-/RR3 ratings to the proposed $450 million senior secured second-lien note under Seadrill Finance.

“Seadrill's rating reflects its improving leverage, strong liquidity profile and well-positioned ultra-deepwater fleet. The company has good visibility for 2023 and 2024 given the strong contract coverage reflected in its $2.6 billion backlog at 1Q23. These strengths are offset by high volatility in utilization and day rates inherent in the offshore drilling market. Seadrill emerged from Chapter 11 restructuring on Feb. 22, 2022, and decreased its debt burden to $908 million,” Fitch said in a press release.

Fitch said it expects widely stable day rates in 2023-2024 with gradual decreases thereafter. Fleet use is expected to increase through 2024 before retreating modestly thereafter in line with the agency oil price assumptions.

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