S&P rates Songa notes B+

Standard & Poor's said it assigned a B+ long-term corporate credit rating to Songa Offshore SE and a B+ rating to the proposed $200 million senior unsecured notes and 3 recovery rating.

The agency also assigned BB loan ratings to Songa's $910 million bank loan ($747.9 million outstanding on Sept. 30, 2009) and revolving credit facility of $140 million ($117.5 million on Sept. 30, 2009) with 1 recovery ratings.

The outlook is stable.

"The corporate credit rating on Songa reflects our view of the company's activities in the highly cyclical and competitive offshore drilling industry, a relatively short contract structure, largely fixed cost structure, significant loan repayments, and only moderate diversification and medium-term contract visibility," S&P analyst Simon Redmond said in a statement.

"The ratings benefit from sound operations and financial performance, the lack of a heavy investment plan, an experienced management team and the potential to deleverage," the agency said.

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