S&P downgrades Ocean Rig, Drillships

Standard & Poor's said it lowered its ratings on Ocean Rig UDW Inc. to B- from B.

The outlook is stable.

At the same time, the agency lowered its issue ratings on:

• Drillships Ocean Ventures Inc.'s $1.3 billion term loan B facility to B from B+. The 2 recovery rating is unchanged, with recovery expectations at the higher end of the range;

• Drill Rigs Holdings Inc.'s $800 million senior secured notes to B- from B. The 3 recovery rating is unchanged, with recovery expectations at the higher end of the range;

• Drillships Financing Holding Inc.'s $1.9 billion term loan B facility to B from B+. The 2 recovery rating is unchanged, with recovery expectations at the higher end of the range; and

• Ocean Rig's $500 million senior unsecured notes due in 2019 to CCC from CCC+. The 6 recovery rating is unchanged.

Ocean Rig has made an intercompany loan to parent DryShips Inc., causing S&P to revise its assessment of Ocean Rig's status within the group.

The agency is therefore lowering its long-term rating on Ocean Rig, but consider Ocean Rig's b standalone credit profile to be unchanged. It is supported by a contract backlog with dayrates above the current market.

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