S&P downgrades Rowan

S&P said it lowered the issuer credit rating on Rowan Cos. plc to B- from B.

The agency also said it raised the B- ratings on Rowan's unsecured notes to B and revised the recovery ratings on the notes to 2 from 5, indicating 70% to 90% expected default recovery.

Rowan and Ensco have completed their merger. The merged company is known as Ensco Rowan plc, S&P said.

S&P also said it withdrew the rating on Rowan's credit facility following its termination in conjunction with the merger.

The negative outlook reflects an expectation that Ensco Rowan's credit measures will be weak for the ratings over the next year, including its debt-to-EBITDA ratio of 10x on average over the next couple of years.

S&P said it lowered the issuer credit rating on Rowan to equalize it with that of Ensco Rowan, as it is now considers Rowan to be a core entity of the combined company.

The agency said it believes Ensco Rowan will likely provide long-term support for Rowan, which represents a substantial proportion of the combined company's asset portfolio.

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