Moody’s ups Ocean Rig UDW, rates facility

Moody's Investors Service said it upgraded Ocean Rig UDW Inc.'s corporate family rating to Caa1 from Ca and probability of default rating to Caa1-PD from D-PD.

The agency also assigned a Caa1 rating to the new $450 million senior secured facility jointly issued by Drillships Financing Holding Inc., Drill Rigs Holdings Inc., Drillships Ocean Ventures Inc. and several other holding companies owning the rigs. All these entities are subsidiaries of Ocean Rig.

The facility is jointly guaranteed by Ocean Rig UDW Inc. and several other holding and operating companies.

The outlook on all ratings was changed to stable from negative.

The ratings on all existing old debt were withdrawn as the obligation is no longer outstanding as a result of the debt restructuring.

Moody’s said the upgrade of the corporate family rating to Caa1 from Ca reflects the successful completion of the debt restructuring process on Sept. 22, after all the conditions pre-requisite for the restructuring were satisfied.

The restructuring resulted in an exchange of around $3.7 billion of debt for new equity of $1.8 billion, cash consideration of approximately $288 million and new secured facility due 2024 totaling $450 million. This resulted in total gross adjusted debt/EBITDA as of LTM June 2017 to fall to around 0.7 times pro-forma for the transaction from 4.4 times, Moody’s explained.

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