Moody's rates Offshore Group loan, notes B3

Moody's Investors Service said it changed Offshore Group Investment Ltd.'s outlook to negative from stable and assigned a B3 rating to the company's proposed $500 million senior secured term loan and $1.15 billion senior secured notes.

Moody's also affirmed Offshore Group's B3 corporate family rating, Caa1 probability of default rating and the B3 rating on Offshore Group's existing 11½% senior secured notes.

"The negative outlook captures Offshore Group's very high leverage, as well as the contracting and inherent start-up risks surrounding the third drillship, which will start generating cash flow in the second half of 2013," Moody's analyst Sajjad Alam said in a news release.

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