S&P lifts Ensign Drilling

S&P said it reassessed Ensign Drilling Inc.'s creditworthiness after reviewing the company's capital structure and liquidity position following several distressed debt repurchases below par in 2020.

As a result, S&P said it raised its issuer credit rating on Ensign to CCC+ from SD (selective default), reflecting the assessment of the company's conventional default risk. S&P also raised its rating on the company's unsecured notes to CCC from D with a recovery rating of 5.

The outlook is negative.

“The CCC+ rating reflects the company's high leverage and refinancing risk associated with the upcoming debt maturities. The upgrade reflects a reassessment of our issuer credit rating on Ensign following the company's below-par debt repurchases over the past several quarters,” S&P said in a news release.

“We viewed the repurchase transactions as distressed because the debt investors received less than what was promised on the original debt obligations.”

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