...Valaris Limited's rating reflects an expected sharp decline in leverage in 2024, as the strong floating drilling rig day rates feed into the company's next-year contract prices. Valaris' credit profile benefits from one of the largest fleets of offshore jackups and floaters, short-term revenue visibility due to the presence of contracts with minimum prices and volumes, and healthy liquidity. Valaris is weaker positioned within its rating after the $400 million tap issuance completed in August 2023. Its Fitch Ratings-projected midcycle EBITDA leverage of 2.8x is close the downgrade sensitivity of 3.0x. The company's profile is negatively affected by high volatility in day rates and rig utilization, combined with an asset-heavy business model and high operating leverage, which together result in considerable swings in EBITDA, depending on the industry cycle....
