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Moody's drops Frontier Drilling to Caa3
Moody's Investors Service said it downgraded Frontier Drilling ASA's corporate family rating to Caa2 from B3, probability-of-default rating to Caa3 from B3, the first secured credit facilities to B2 (LGD2, 10%) from B1 (LGD2, 28%) and second-lien senior secured term loan to Caa3 (LGD3, 32%) from Caa1 (LGD5, 73%).
Ratings remain under review for further downgrade.
The Caa2 rating reflects the increased liquidity pressures from lower-than-expected earnings and cash flow, the agency said.
The Duchess also has not been signed to a new contract, which raises the possibility of a covenant breach this quarter, Moody's noted.
The Caa3 probability-of-default rating reflects Moody's view that there is a significantly increased default risk given its multiple issues, the agency said.
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