S&P: Ocean Rig on watch

Standard & Poor's said it placed the B corporate credit rating on Ocean Rig UDW Inc. on CreditWatch with negative implications, along with the B and CCC+ issue ratings on the company's senior secured and senior unsecured debt issuances, respectively.

The CreditWatch placements reflect Ocean Rig's lack of firm financing for the three new drillships of which it plans to take delivery in the second half of 2013, in combination with weaker operating results than anticipated in 2012 to date, the agency said.

The latter will lead to tight covenant headroom for the next 12 months, S&P said.

In addition, the agency said it sees a risk that the weak performance of the company's parent, DryShips Inc. could have adverse consequences for Ocean Rig, the agency said.

For instance, the recently amended documentation allows for dividend payouts by Ocean Rig, S&P said.

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