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S&P: Ocean Rig B, notes CCC+
Standard & Poor's said it assigned a B corporate credit rating to Ocean Rig UDW Inc., along with CCC+ rating and 6 recovery rating to the company's $500 million of senior unsecured notes issued in April 2011.
The recovery rating indicates 0% to 10% expected recovery in a default.
The outlook is stable.
The rating reflects the company's highly leveraged financial risk profile and the fact that it is majority-owned and controlled by a weaker parent, DryShips Inc., S&P said.
Other weaknesses include the company's participation in the highly cyclical and competitive offshore drilling industry, aggressive growth and funding strategies, weak corporate governance practices and high levels of debt, S&P said.
Relative strengths include a fair contract structure, a young and diverse drilling fleet, experienced operational management and the potential to generate material free operating cash flow, the agency said.
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