Moody's may cut Frontier Drilling

Moody's Investors Service said it placed Frontier Drilling ASA's (FDR), B3 corporate family rating, B3 probability of default rating (PDR), B1 first secured credit facilities (LGD2, 28%) and Caa1 second-lien senior secured term loan (LGD5, 73%) under review for possible downgrade.

The review for possible downgrade is prompted by the drillship Duchess coming off a well to well contract earlier than expected in January resulting in lost revenues and cash flows, the agency said.

The lower than expected earnings and cash flows from the Duchess, the company's election to accelerate planned shipyard work for the Duchess and another set of cost overruns for the drillship Phoenix upgrade will result in the need for additional liquidity over the next quarter, which will also cause leverage to increase, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.