At December 31, 2023 and 2022, the carrying value of our long-term debt, net of unamortized discount, premium and debt issuance costs, was comprised as follows (in thousands):


	December 31,
	2023		2022
$550 Million Senior Secured Second Lien Notes due 2030	$	533,514	$	—
Borrowings under Exit RCF		—		177,478
$100.0 Million Exit Term Loan		—		99,190
9.00%/11.00%/13.00% Senior Secured First Lien PIK Toggle Notes due 2027		—		83,976
Total Long-term debt	$	533,514	$	360,644

At December 31, 2023, the aggregate annual maturity of our Senior Secured Second Lien Notes, excluding net debt issuance costs of $16.5 million, was as follows (in thousands):


Year ending December 31,	Aggregate Principal Amount
2024		—
2025		—
2026		—
2027		—
2028		—
Thereafter		550,000
Total maturities of long-term debt	$	550,000

On September 21, 2023, DFAC and DFLLC (which we refer to collectively as the Issuers) issued $550 million aggregate principal amount of 8.5% Senior Secured Second Lien Notes due 2030 (which we refer to as the Second Lien Notes) in a private placement. The Second Lien Notes were issued at par for net proceeds of approximately $540.0 million after deduction of certain estimated offering expenses. The Second Lien Notes mature on October 1, 2030, and interest is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2024.

The Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Diamond Offshore Drilling, Inc. (or DODI) and each of its existing restricted subsidiaries (other than the Issuers) and by certain of DODI’s future restricted subsidiaries (other than the Issuers) that guarantee any debt of the Issuers or any guarantor under any syndicated credit facility or capital markets debt in an aggregate principal amount in excess of a certain amount (or, collectively, the Subsidiary Guarantors and, together with DODI, the Guarantors). The Second Lien Notes and the related guarantees are secured on a second-priority basis, subject to certain permitted liens, by substantially all the assets of, and equity interests in, the Issuers and the Subsidiary Guarantors.

On or after October 1, 2026, the Issuers may, at their option, redeem all or any portion of the Second Lien Notes from time to time upon not less than 10 days nor more than 60 days prior notice, at the redemption prices set forth below, plus accrued and unpaid interest if any, to, but excluding, the redemption date. The following prices are for Second Lien Notes redeemed during the 12-month period commencing on October 1 of the years set forth below, and are expressed as percentages of principal amount:


Redemption Year	Price
2026		104.25	%
2027		102.13	%
2028 and thereafter		100.00	%

At any time and from time to time, prior to October 1, 2026, the Issuers may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the Second Lien Notes issued under the Indenture (as defined below) (including any additional Second Lien Notes, if any) with an amount equal to or less than the net cash proceeds of one or more equity offerings, at a redemption price equal to 108.500% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to but excluding, the redemption date provided; however, that immediately after giving effect to any such redemption, at least 65% of the original aggregate principal amount of Second Lien Notes issued on the issue date (excluding Second Lien Notes held by DODI or its subsidiaries) remains outstanding.

In addition, at any time prior to October 1, 2026, the Issuers may redeem up to 10% of the original aggregate principal amount of the Second Lien Notes issued under the Indenture (including additional Second Lien Notes, if any) during any twelve-month period at a redemption price equal to 103.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

At any time prior to October 1, 2026, the Issuers may redeem some or all of the Second Lien Notes at a price equal to 100% of the principal amount of the Second Lien Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” premium.

The Second Lien Notes are governed by an indenture, dated as of September 21, 2023 (or the Indenture), entered into by the Issuers, DODI and certain of its subsidiaries named therein and HSBC Bank USA, National Association (or HSBC), as trustee and collateral agent. The Indenture contains covenants that, among other things, restrict DODI’s ability and the ability of certain of its subsidiaries to: (i) incur additional debt and issue certain preferred stock; (ii) incur or create liens; (iii) make certain dividends, distributions, investments and other restricted payments; (iv) sell or otherwise dispose of certain assets; (v) engage in certain transactions with affiliates; and (vi) merge, consolidate, amalgamate or sell, transfer, lease or otherwise dispose of all or substantially all of DODI’s assets. These covenants are subject to important exceptions and qualifications. In addition, many of these covenants will be suspended with respect to the Second Lien Notes during any time that the Second Lien Notes have investment grade ratings from at least two rating agencies and no default with respect to the Second Lien Notes has occurred and is continuing.

Upon the occurrence of a certain Change of Control Triggering Event (as defined in the Indenture), the Issuers may be required to make an offer to repurchase all of the Second Lien Notes then outstanding at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

We used a portion of the net proceeds from the Notes Offering to fully repay outstanding borrowings under and terminate our Exit Term Loan Credit Facility, redeem in full our 9.00%/11.00%/13.00% Senior Secured First Lien PIK Toggle Notes due 2027 (which we refer to as the First Lien Notes) and repay all amounts outstanding under the Exit RCF. The remaining net proceeds will be used for general corporate purposes.

The Second Lien Notes were valued at par and presented net of unamortized debt issuance costs of $17.0 million, which are being amortized as interest expense over the stated maturity of the Second Lien Notes using the effective interest method. At December 31, 2023, the effective interest rate on the Second Lien Notes was 9.09%.

On April 23, 2021, we entered into the Exit Revolving Credit Agreement, which provided for a $400.0 million senior secured revolving credit facility and also originally provided for certain lenders (or the LC Lenders) to issue up to $100.0 million of letters of credit thereunder (which we refer to as the Exit RCF). Prior to the Notes Offering, three of the four initial LC Lenders had resigned, reducing availability to issue letters of credit under the Exit RCF to $25.0 million.

On September 12, 2023, DFAC, as borrower, DODI, as parent, certain of the lenders party thereto, and HSBC, as administrative agent and collateral agent, entered into an amendment (or the Credit Agreement Amendment) to the Exit Revolving Credit Agreement. The Credit Agreement Amendment amended the Exit RCF (or, as amended, the Amended RCF) to, among other things, (i) reduce the aggregate commitment of the lenders thereunder from $400.0 million to $300.0 million, (ii) permit the Notes Offering and (iii) permit us to incur up to an aggregate of $50.0 million of indebtedness in respect of outstanding letters of credit that may be issued on our behalf outside of the

Amended RCF. The Credit Agreement Amendment became effective concurrently with the consummation of the Notes Offering, which was conditioned on the Credit Agreement Amendment becoming effective.

Borrowings under the Amended RCF may be used to finance capital expenditures, pay fees, commissions and expenses in connection with the loan transactions and consummation of the Plan, and for working capital and other general corporate purposes. Availability of borrowings under the Amended RCF is subject to the satisfaction of certain conditions, including restrictions on borrowings if, after giving effect to any such borrowings and the application of the proceeds thereof, (i) the aggregate amount of Available Cash (as defined in the Amended RCF) would exceed $125.0 million, (ii) the Amended RCF Collateral Coverage Ratio (as defined below) would be less than 2.00 to 1.00 or (iii) the Total Collateral Coverage Ratio (as defined below) would be less than 1.30 to 1.00.

Available Cash in excess of $125.0 million is also required to be applied periodically to prepay loans. The loans under the Amended RCF may be voluntarily prepaid and the commitments thereunder voluntarily terminated or reduced by DFAC at any time without premium or penalty, other than customary breakage costs.

The Amended RCF obligates DODI, DFAC and their restricted subsidiaries to comply with the following financial maintenance covenants:

• as of the last day of each fiscal quarter, the ratio of (a) the Collateral Rig Value (as defined in the Amended RCF), to (b) the aggregate outstanding principal amount of all Loans and L/C Obligations (each as defined in the Amended RCF) thereunder (or the Amended RCF Collateral Coverage Ratio) is not permitted to be less than 2.00 to 1.00; and

• as of the last day of each fiscal quarter, the ratio of (a) the Collateral Rig Value to (b) the sum of (1) the aggregate outstanding principal amount of all Loans and L/C Obligations thereunder, plus (2) the aggregate outstanding principal amount of the Second Lien Notes as of such date (or the Total Collateral Coverage Ratio) not permitted to be less than 1.30 to 1.00.

The Amended RCF contains negative covenants that limit, among other things, the ability of each of DODI, DFAC and their restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness; (ii) create, incur or assume liens; (iii) make investments; (iv) merge or consolidate with or into any other person or undergo certain other fundamental changes; (v) transfer or sell assets; (vi) pay dividends or distributions on capital stock or redeem or repurchase capital stock; (vii) enter into transactions with certain affiliates; (viii) prepay, redeem or amend certain indebtedness; (ix) sell stock of its subsidiaries; or (x) enter into certain burdensome agreements. These negative covenants are subject to a number of important limitations and exceptions.

Additionally, the Amended RCF contains other covenants, representations and warranties and events of default that are customary for a financing of this type. Events of default include, among other things, nonpayment of principal or interest, breach of covenants, breach of representations and warranties, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, failure of a security document to create an effective security interest in collateral, bankruptcy and insolvency events, cross-default to other material indebtedness, and a change of control.

Loans under the Amended RCF bear interest at (i) the Base Rate plus the Applicable Margin (each as defined in the Amended RCF) or (ii) Adjusted Term SOFR (as defined in the Amended RCF) plus the Applicable Margin.

DFAC is required to pay a quarterly commitment fee under the Amended RCF, which accrues at a rate per annum equal to 0.50% on the average daily unused portion of the lenders’ commitments under the Amended RCF. DFAC is also required to pay customary letter of credit and fronting fees.

On September 21, 2023, we repaid the aggregate principal amount of borrowings outstanding under the Amended RCF of approximately $189.0 million plus accrued and unpaid interest thereon through the repayment date in full with a portion of the proceeds of the Notes Offering. In addition, we wrote off a pro rata portion of unamortized deferred debt arrangement fees related to the reduction in borrowing capacity under the Amended RCF. We reported the $1.3

million write-off of fees as “Loss on extinguishment of long-term debt” in our Consolidated Statements of Operations for the year ended December 31, 2023.

On October 24, 2023, Barclays Bank PLC (or Barclays), gave notice of its resignation as an LC Lender under the Amended RCF. Our capacity for issuing additional letters of credit under the Amended RCF has been reduced to zero. However, the Amended RCF permits us to incur up to $50.0 million of indebtedness in respect of outstanding letters of credit that may be issued on our behalf outside of the Amended RCF.

At December 31, 2023 and February 23, 2024, we had no borrowings outstanding under the Amended RCF and had utilized $1.9 million for the issuance of a letter of credit. The outstanding letter of credit will expire on maturity in May 2024, unless replaced. As of February 23, 2024, approximately $298.1 million was available for borrowings under the Amended RCF subject to its terms and conditions. There was no capacity to issue additional letters of credit under the Amended RCF.

At December 31, 2023, we were in compliance with all covenants under the Second Lien Notes and Amended RCF.

Our Exit Term Loan Credit Agreement provided for a $100.0 million senior secured term loan credit facility which was used in its entirety to refinance a portion of the prepetition revolving credit facility. The Exit Term Loan Credit Facility was set to mature on April 22, 2027.

The Exit Term Loans bore interest at a rate per annum equal to the applicable margin plus, at the borrower’s option, either (a) the reserve-adjusted LIBOR Rate (as defined in the Exit Term Loan Credit Agreement) subject to a floor of 1.00% (or LIBOR Rate Term Loans), or (b) a base rate (or Base Rate Term Loans), subject to a floor of 2.00%, determined as the greatest of (i) the Wells Fargo Prime Rate (as defined in the Exit Term Loan Credit Agreement), (ii) the federal funds effective rate plus ½ of 1.00%, and (iii) the reserve-adjusted one-month LIBOR Rate plus 1.00%. The margin applicable to LIBOR Rate Term Loans was 6.00%. Interest on Base Rate Term Loans was paid quarterly.

In September 2023, we used a portion of the proceeds from the Notes Offering to repay all outstanding Exit Term Loans, aggregating $100.0 million, and unpaid interest thereon through the repayment date. As a result of the repayment of the Exit Term Loans, we wrote off $0.7 million in unamortized deferred arrangement fees as “Loss on extinguishment of long-term debt” in our Consolidated Statements of Operations for the Successor year ended December 31, 2023.

On the Effective Date, we issued the 9.00%/11.00%/13.00% Senior Secured First Lien PIK Toggle Notes in the aggregate amount of $85.3 million with an original maturity date of April 22, 2027. The First Lien Notes were issued at 101% of par value.

Interest on the First Lien Notes accrued at a rate of 9.00% per annum, assuming a cash interest payment option, and was payable semi-annually in arrears on April 30 and October 31 of each year. In addition, the Issuers incurred a commitment premium of 3% per annum on the aggregate principal amount of undrawn delayed draw First Lien Notes pursuant to the terms of the First Lien Notes Indenture.

We redeemed the First Lien Notes in full, in the aggregate principal amount of $85.3 million, including accrued and unpaid interest through September 21, 2023, at 104% in accordance with the First Lien Notes Indenture with a portion of the proceeds of the Notes Offering. The $3.4 million call premium paid on retirement of the First Lien Notes, in addition to the write-off of $(0.6) million and $1.7 million of unamortized premium and deferred arrangement fees, respectively, were reported as “Loss on extinguishment of long-term debt” in our Consolidated Statements of Operations for the Successor year ended December 31, 2023.

Upon retirement of the First Lien Notes, unfunded delayed draw commitments aggregating $39.7 million under the First Lien Notes Indenture also terminated.

On September 21, 2023, DODI, the Issuers and the subsidiary guarantors that are also grantors of collateral entered into an Amended and Restated Collateral Agency and Intercreditor Agreement with HSB as trustee, collateral agent and administrative agent under the Amended RCF (or the Collateral Agency Agreement). The Collateral Agency Agreement, among other things, sets forth the terms on which the collateral agent will receive, hold, administer, maintain, enforce and distribute the proceeds of all liens upon any property of the Issuers and the Guarantors at any time held by it, for the benefit of the current and future holders of First Lien Obligations and Junior Lien Obligations (each as defined in the Collateral Agency Agreement) as well as establishing the priority of the liens on the collateral as between the First Lien Obligations and Junior Lien Obligations.