S&P lowers Offshore Drilling view to negative

Standard & Poor’s said it affirmed the B+ corporate credit and secured debt ratings on Offshore Drilling Holding SA and revised the outlook to negative from stable.

The negative outlook reflects a view that there is a one-third chance that the company’s contracts could be revised, suspended or cancelled in the next 12 months in a negative industry environment, S&P said.

The recovery rating on the issue-level rating is unchanged at 3.

The outlook also considers an expectation that the offshore drilling market will remain weak amid the slide in oil-price assumptions and a belief that the cost-cutting strategy of Petroleos Mexicanos will reduce Offshore’s cash-generating ability due to affected day rates, S&P said.

The ratings reflect the company’s weak business risk profile, aggressive financial risk profile and adequate liquidity, the agency said.

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