S&P rates Diamond Offshore notes BB-

S&P said it assigned its BB- issue-level and 4 recovery rating to Diamond Offshore Drilling Inc.'s proposed senior notes due 2025. The company is expected to use proceeds to repay its $500 million 5 7/8% senior notes maturing in 2019.

At the same time, S&P revised the recovery rating on Diamond's existing senior unsecured debt to 4 from 3 and affirmed the BB- issue-level ratings. The 4 recovery rating indicates an expectation for average (30%-50%; rounded estimate: 40%) recovery to creditors in the event of a payment default. The lower recovery expectation is due to a reduced estimate for Diamond's valuation at the time of a hypothetical default scenario.

S&P’s BB- corporate credit rating and negative outlook on Diamond are unchanged.

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