Moody's might downgrade Brazilian rated vessels

Moody's Investors Service said it placed the Baa3 ratings of the senior secured notes of the following Brazilian rated vessels on review for possible downgrade: Lancer Finance Co. (SPV) Ltd., Schahin II Finance Co. (SPV) Ltd., Odebrecht Drilling Norbe VIII/IX Ltd., Odebrecht Offshore Drilling Finance Ltd., QGOG Atlantic/Alaskan Rigs Ltd. and SBM Baleia Azul, SII/ Sarl.

The agency said it placed the ratings on review due to the convergence of a number of credit pressures that include weakening industry fundamentals, uncertainties due to the ongoing corruption allegations and liquidity risk associated to the deteriorating credit profile of Petroleo Brasileiro SA, the sole contractual off-taker and revenue source to service the outstanding debt of these projects.

On Dec. 23, Moody's placed Petrobras' Baa2 ratings on review for downgrade due to concerns about potential liquidity pressures that could arise if Petrobras fails to meet requirements under its bond indenture for the delivery of financial statements and bondholders choose to take actions that could lead to debt acceleration.

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