Fitch lowers QGOG Atlantic notes to BB-

Fitch Ratings said it downgraded QGOG Atlantic/Alaskan Rigs Ltd.’s series 2011-1 senior secured notes due 2019 to BB- from BB.

The outlook remains negative.

The notes are backed by the flows related to the charter agreements signed with Petroleo Brasileiro (Petrobras) for the use of the moored semi-submersibles Atlantic Star and Alaskan Star. Queiroz Galvao Oleo e Gas SA (QGOG) is the operator of the vessels and QGOG Constellation SA is the primary sponsor of the transaction.

Fitch said the downgrade reflects the downgrade to Petrobras and the agency’s weakening view of the strength of Petrobras’ payment obligation given continued pressure on global day-rates and asset values caused by stressed oil prices and Petrobras' willingness to terminate existing charter agreements in the event of a contract breach.

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