S&P cuts Oceaneering International

S&P said it downgraded the ratings on Oceaneering International Inc. and its unsecured notes to BB from BB+. The recovery rating remains 3, indicating the agency’s expectation of meaningful (50%-70%; rounded estimate: 65%) recovery to creditors in the event of a payment default.

“The downgrade reflects a slower-than-previously-anticipated recovery in demand for offshore oilfield services, leading us to reduce our EBITDA and cash flow estimates for Oceaneering International Inc. As a result, we do not expect the company's leverage metrics to improve as rapidly as previously expected. We now project a funds from operations (FFO)-to-debt ratio of just 15%-20% in 2019 and 20%-25% in 2020, before improving to above 30% in 2021 (versus our prior estimates of about 25% in 2019 and over 30% in 2020),” said S&P in a press release.

The outlook is negative.

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