Moody's rates Diamond Offshore notes B3

Moody's Investors Service said it assigned new ratings to Diamond Offshore Drilling, Inc., including a B2 corporate family rating, a B2-PD probability of default rating, an SGL-2 speculative grade liquidity rating and a B3 rating to its planned senior secured second-lien notes to be issued by its wholly owned subsidiaries, Diamond Foreign Asset Co. and Diamond Finance, LLC as co-issuer. The outlook for both Diamond and Diamond Foreign Asset is stable.

The company will use the proceeds to repay debt, pay transaction costs and for general corporate purposes.

"Diamond's proposed refinancing transaction will simplify the company's capital structure, add liquidity, and extend its maturity schedule," said Jake Leiby, a Moody's vice president, in a press release. "Upon closing, the company will have $500 million of balance sheet debt and greater than $400 million of total liquidity, including available borrowing capacity under its amended $300 million senior secured credit facility."

The outlook reflects Diamond's contract backlog and an expectation for leverage to improve as rigs roll onto higher-priced contracts over the remainder of 2023 and in 2024, the agency said.

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