S&P ups Vantage Drilling outlook to positive

Standard & Poor's said it revised its outlook on Vantage Drilling Co. to positive from stable and affirmed the B- corporate credit rating on the company.

The issue-level rating on the senior secured notes will remain B- (the same as the corporate credit rating) following the proposed $775 million tack-on to its existing $1.225 billion 11½% notes due 2015. The recovery rating is 3, indicating S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default.

The notes will be issued by Offshore Group Investment Ltd., which is a wholly owned subsidiary of Vantage (Vantage guarantees the notes).

"The outlook revision reflects our view that the addition of the Dragonquest drillship will improve Vantage's credit risk profile because the eight-year contract provides good cash flow visibility," said S&P credit analyst Marc D. Bromberg in a news release.

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