Fitch lowers Odebrecht Drilling

Fitch Ratings said it downgraded the senior secured notes issued by Odebrecht Drilling Norbe VIII/IX Ltd. to C from CC and affirmed the rating assigned to the senior secured notes issued by Odebrecht Offshore Drilling Finance Ltd. (OODFL) at D.

The rating actions on the notes follow news that Odebrecht Oleo e Gas SA and certain subsidiaries have entered into an agreement with a group of creditors to restructure their financial debt, Fitch explained.

According to the restructuring plan, the notes issued by Odebrecht Drilling and Odebrecht Offshore will be exchanged for new notes with revised terms based on the present cash flow of the assets, the agency said.

Under the terms of the new notes, amortizations will occur quarterly in two tranches, Fitch said.

The agency said the restructuring agreement will result in a distressed debt exchange (DDE) as the restructuring will take place in order to avert a probable payment default on the notes and the economic terms of the issuances will be reduced.

Since issuance, the operating environment for the assets securing the 2021 and 2022 bonds has changed and the targeted operating metrics have not been met, Fitch added.

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