Moody's downgrades Rowan

Moody's Investors Service said it downgraded Rowan Cos., Inc.'s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and senior unsecured notes to Caa1 from B2.

The speculative grade liquidity rating also was affirmed at SGL-1.

The outlook remains negative.

The downgrades reflect Rowan's deteriorating credit metrics through 2019, resulting from low utilization rates and continued pressure on dayrates, Moody's said.

The notes downgrade additionally reflects its contractual subordination to Rowan's new revolving credit facility, which has guarantees from material Rowan subsidiaries and therefore, a priority claim to Rowan's assets, the agency explained.

The negative outlook reflects the uncertain timing and magnitude of a recovery in the challenged offshore drilling market, especially for drillships, Moody's said.

Rowan's increasing financial leverage despite pro-active maturity management and liquidity enhancing efforts also affects the ratings, the agency said.

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