S&P cuts Transocean view to negative

Standard & Poor’s said it affirmed its BB+ corporate credit rating on Transocean Inc. and revised the outlook to negative from stable.

At the same time, S&P affirmed the BB+ issue-level rating on the company’s senior unsecured debt. The recovery rating on the debt remains 3, indicating an expectations for meaningful (high end of the 50% to 70% range) recovery in the event of a default.

“The outlook revision follows our review of Transocean’s ratings in the context of lower expectations for demand for offshore drilling services,” said S&P credit analyst Ben Tsocanos in a news release. “We forecast that credit measures will be weak for the BB+ rating despite the company’s progress reducing expenses, retiring drilling rigs, and deferring capital spending.”

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