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Fitch lowers Odebrecht notes
Fitch Ratings said it downgraded the senior secured notes issued by Odebrecht Offshore Drilling Finance Ltd. to B+ from BB and the senior secured notes issued by Odebrecht Drilling Norbe VIII/IX Ltd. to BB- from BB.
In addition, the agency placed the ratings of both transactions on Rating Watch Negative.
Fitch said the downgrade reflects the following: (a) The impact of Petrobras' reduction in capital expenditures (capex) on its willingness to honor existing contracts upon a performance breach or bankruptcy of the operator; and (b) the transactions' increased reliance on the sponsor which may continue suffering from decreasing revenues due to either poor assets' performance or non-operation of one of the rigs.
The negative watch reflects Petroleo Brasileiro SA’s (Petrobras) announcement of its intention to terminate the contract for Tay IV and its potential direct impact on Odebrecht Offshore Drilling, and Odebrecht Oleo e Gas SA as sponsor to both transactions.
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