Moody's lowers Noble

Moody's Investors Service said it downgraded Noble Corp.'s senior unsecured regular bond/debenture to Baa2 from Baa1, senior unsecured shelf rating to Baa2 from Baa1, subordinate shelf rating to Baa3from Baa2 and its junior subordinate shelf rating to Ba1 from Baa3.

Noble's prime-2 commercial-paper rating was affirmed and its outlook was changed to stable from negative, Moody's said.

Noble Drilling Corp.'s senior unsecured regular bond/debenture also was downgraded to Baa2 from Baa1; Noble Holding International Ltd.'s senior unsecured regular bond/debenture was downgraded to Baa2 from Baa1, senior unsecured shelf rating toBaa2 from Baa1, subordinate shelf rating to Baa3 from Baa2 and junior subordinate shelf to Ba1 from Baa3.

The downgrades reflect the company's weaker-than-expected operating performance and persistently high financial leverage, the agency said.

The downgrades also consider the company's increasing focus on growth and shareholder returns and less conservative financial policies, Moody's said.

Delays in the initial operations of several new and upgraded drilling rigs have reduced expected earnings and cash flow for Noble in 2013, the agency said.

The company also proposed an increase in its dividend that will take effect in the second half of 2013, Moody's added.

These factors will lead to higher negative free cash flow and borrowings to fund new drilling rig construction in 2013 and 2014 with an expected debt-to-EBITDA ratio at or above 3x for the remainder of 2013, the agency said.

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