RIG's new amended RCF keeps RP leverage and liquidity thresholds unchanged, but with some looser terms adding shareholder-return flexibility The key dividend driver is VAL merger accelerates deleveraging at close and over the next 12 months as three 7G drillships return to work - From 5.5x net leverage at YE24, Transocean has deleveraged to ~3x currently, mostly due to converting backlog into cash for debt reduction. The deleveraging aspect of the all-stock merger is key for Transocean; incorporating Valaris’ balance sheet (currently ~1.3x net leverage) should reduce net leverage to ~2.5x at close, with a visible path to ~2.0x by 2Q27. - After Transocean delivered Atlas, Titan and Aquila (acquired) in 2022-2023, capex has materially declined to maintenance, modest upgrades and SPS levels, which supports meaningful free cash flow (OCF-Capex) averaging ~$180mm per quarter since 2024. The organic deleveraging is likely to continue, which makes underwriting 2x net leverage (covenant definition) by 2Q27 reasonable. - Further, Valaris’ TTM EBITDA of $424mm represents a cyclical trough, depressed by idle (warm) rigs in TTM period. Operating leverage turns positive over the next 12 months as 7G drillships DS-10 (June 2026), DS-15 (Sept 2026) and DS-18 (4Q26) return to work. Activations are likely to draw on working capital initially, but EBITDA growth is clear, with cash flow to follow. Transocean avoided this drag because due to its Norway-eligible harsh-environment semisub fleet, a market in which Valaris has no exposure. Valaris’ 7G drillships were hit by delays in West Africa during 2025 but are now scheduled to recover. The combined company has a more diversified fleet, which should lower its cost of capital, all else equal. - The Net Leverage calculation in Transocean’s RCF credit agreement excludes the $286mm of Restricted Cash on its 6/30/2026 balance sheet. Restricted cash consists largely of Debt Service Reserve Accounts funding the next 12 months of amortization and interest on Transocean’s secured bonds. These funds are structurally dedicated to secured bondholders, not the bank group on Transocean’s revolver so are excluded from its net leverage calculation. - Transocean’s repayment of its Poseidon, Titan and now Aquila secured bonds both reduces debt and releases restricted cash, which receives no credit under the revolver’s net leverage covenant. The 2030 secured notes had $822mm outstanding at 6/30/26, falling to ~$763mm after the August paydown. With the call premium stepping down from 104.375 to 102.188 in February 2027, a refinancing into unsecureds is logical; eliminating $117.5mm of annual amortization could fund a larger dividend program, though is subject to Board capital allocation policy...