S&P downgrades Transocean, debt

S&P said it lowered its corporate credit rating on Transocean Inc. to B+ from BB-.

The outlook is negative.

At the same time, the agency downgraded the issue-level rating on the company's secured debt to BB from BB+. The recovery rating remains 1, indicating an expectation of very high (90% to 100%) recovery to creditors in the event of a default.

S&P also downgraded its issue-level rating on the company's senior unsecured debt without subsidiary guarantees to B+ from BB-. The recovery rating remains 3, reflecting an expectation of meaningful (50%-70%, upper half of the range) recovery in the event of default.

The recovery rating on Transocean's senior unsecured debt with subsidiary guarantees was revised to 2 from 3, reflecting an expectation of substantial (70%-90%, upper half of the range) recovery in the event of default. The BB- issue-level rating on this debt is unchanged.

In addition, the agency lowered its issue-level rating on subsidiary Global Marine Inc.'s senior unsecured debt to B- from BB- and the recovery rating to 6 from 3, reflecting an expectation of negligible (0%-10%) recovery in the event of default.

"The downgrade reflects our revised assessment for Transocean's financial risk profile, reflecting our revised expectations for recovery in demand for offshore contract drilling services," S&P credit analyst Ben Tsocanos said in a news release.

"This revision results in weaker leverage through 2018, which is consistent with the lower rating."

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