Fitch downgrades Odebrecht

Fitch Ratings said it downgraded the senior secured notes issued by Odebrecht Offshore Drilling Finance Ltd. to B- from B+ and the senior secured notes issued by Odebrecht Drilling Norbe VIII/IX Ltd. to B from BB-.

The ratings remain on Rating Watch negative, Fitch added.

The downgrades reflect the termination of the ODN Tay IV charter and services agreements by the off-taker Petroleo Brasileiro SA (Petrobras), the agency said, and the impact of Petrobras' additional reduction in capital expenditures on its willingness to honor existing contracts upon a performance breach or bankruptcy of the operator.

The negative watch reflects the potential direct impact on Odebrecht if the notes are either accelerated or restructured as a result of the cancellation of the Tay IV charter and service agreements and the sponsor's inability to re-charter the vessel or replace the asset by Dec. 23, Fitch said.

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