S&P lowers Offshore Drilling

S&P said it lowered the corporate credit and secured debt ratings on Offshore Drilling Holding SA to CCC from B+.

The outlook is negative.

The agency also said it revised the recovery rating on the issue-level rating to 4 from 3, indicating 30% to 50% expected default recovery.

In the last 12 months, the company’s cash flow generation plunged after one of its contracts was suspended, S&P said.

As a result, the agency said it believes the company's capital structure is unsustainable and the issuer might default in 2018 without an unforeseen positive business development.

The company’s fragile financial situation follows the temporary suspension of operations in the Bicentenario rig and a reduction of day rates for the Centenario and La Muralla IV rigs, S&P explained.

Although the company is making efforts to resume the Bicentenario contract, the success of the negotiations is highly uncertain given the challenging conditions for the offshore drilling market in the short- to medium-term, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.