Moody’s lowers Ocean Rig, notes, loan

Moody's Investors Service said it downgraded Ocean Rig UDW Inc.'s corporate family rating to Ca from Caa2 and probability of default rating to D-PD from Caa2-PD.

The agency also downgraded the rating of Ocean Rig's unsecured notes to C from Ca, as well as the rating on the senior secured term loan B at Drillships Ocean Ventures Inc., a subsidiary of Ocean Rig, to Ca from Caa2.

Concurrently, Moody's downgraded the rating on the senior secured term loan B1 borrowed by Drillships Financing Holding Inc. to Ca from Caa2 and the rating on the secured notes issued by Drill Rigs Holdings Inc. to C from Caa3, both are also subsidiaries of Ocean Rig.

The outlook remains negative.

On March 28, Ocean Rig announced that it entered into a Restructuring Support Agreement (RSA) with creditors representing over 72% of the company's outstanding debt of roughly $3.8 billion at the end of 2016.

“This action is aimed at restructuring the capital structure of the company in light of the low profitability and cash flow expected over the next years due to the depressed market conditions for deep offshore oil exploration and drilling,” Moody’s said in a news release.

“The company also filed for Chapter 15 in the U.S. to ensure that the decision of the Cayman Islands Court will be recognized in the U.S. Moody's views the filing under Chapter 15 of the U.S. Bankruptcy code as a default.”

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