Moody's affirms Transocean

Moody's Investors Service said it affirmed the Baa3 senior ratings of Transocean, Inc. following its announced agreement to acquire Aker Drilling ASA for $2.2 billion, including net debt assumed.

The outlook remains negative, reflecting the uncertainties regarding Transocean's potential liability exposures related to the Macondo well blowout and subsequent oil spill in 2010.

The Aker Drilling acquisition will increase Transocean's leverage and reduce its financial flexibility as the transaction will be funded initially using existing cash balances and debt facilities, the agency said.

The ratings affirmation is based on the expectation that the leveraging effect of this acquisition will be more than reversed over the remainder of 2011 and 2012 through management's stated plan of reducing debt through free cash flow, the agency added.

The affirmation also reflects the high specification nature of Aker Drilling's ultradeepwater fleet, consisting of two harsh environment semisubmersible drilling rigs and two drillships under construction in Korea, Moody's said.

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