S&P rates Ocean Rig notes B-

Standard & Poor's said it assigned its B- rating to Ocean Rig Norway AS's $150 million senior secured second-lien notes and raised the corporate credit rating to B- from CCC and removed it from CreditWatch with positive implications.

The outlook is stable.

The upgrade reflects improved cash flow prospects in light of extended contract backlog and substantially improved contract day rates for the fifth-generation drilling units, S&P said.

The agency noted that the new notes in conjunction with a $430 million senior secured credit facility will be used to refinance nearly all of Ocean Rig's existing debt.

The ratings reflect a highly leveraged financial profile and a vulnerable business position underpinned by the company's limited number of offshore drilling units, S&P said.

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