Moody’s changes QGOG Atlantic to negative

Moody's Investors Service said it affirmed the B1 rating of the senior secured global notes due July 2018 issued by QGOG Atlantic/Alaskan Rigs Ltd.

The outlook was changed to negative from stable.

The action reflects the relatively strong operating performance of the underlying drilling vessels as measured by average uptime, the competitive chartered day rates as compared to current market day rates, the maturity of the notes, the liquidity arrangements as measured by the level of reserve accounts, and the lower refinancing risk at the notes' maturity due to the debt amortization profile.

Moody’s said the outlook change reflects its views that despite the project´s strengths, there is a higher risk that Petroleo Brasileiro SA (Ba2 stable), the sole off-taker in this project, will undertake actions to reduce its operating costs, including a potential renegotiation of the charter contracts to obtain lower day rates. It is the agency’s understanding that Petrobras may take action to terminate the contracts for vessels that have presented any material operational weaknesses.

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