Moody's downgrades Shelf Drilling

Moody's Investors Service said it downgraded Shelf Drilling, Ltd.'s corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD. The rating on the $900 million of senior unsecured bonds sold by Shelf Drilling Holdings, Ltd. was downgraded to Caa1 from B3. The outlook is stable.

The rating action reflects Shelf Drilling's sustained high financial leverage and weak credit metrics, with debt/EBITDA over the next 12-18 months unlikely to improve towards the 5x level that was required for the B2 rating. Despite the improving operating conditions in the shallow water drilling market and the expected improvement in Shelf Drilling's credit metrics in 2020 and beyond, Moody's said it views the company's overall debt burden to be significant relative to the amount of free cash flow that is expected to be generated over the coming years.

© 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.