S&P: GlobalSantaFe unaffected

Standard & Poor's said that GlobalSantaFe Corp.'s (A-/positive/A-2) announcement that it is redeeming its zero-coupon convertible debentures due June 2020 for cash will not affect the ratings or outlook on the company.

Although the company can repay the debentures in stock, cash, or a combination of both, the company will use only cash. If all outstanding debentures are surrendered for repurchase, the total cash purchase price will be about $356.6 million.

Assuming a full repurchase, GlobalSantaFe will have in excess of $500 million in cash and equivalents, an amount almost equal to the company's outstanding debt. Based on the company's strong liquidity, favorable operating environment, and considerably reduced capital needs, the ratings could be revised upward in the near term, particularly if the company continues to generate improvement in its turnkey drilling segment, S&P said.

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