S&P cuts Odebrecht Offshore notes to CCC

S&P said it lowered its rating on Odebrecht Offshore Drilling Finance Ltd.'s notes to CCC from CCC+ and maintained the rating on CreditWatch with negative implications.

S&P said the downgrade reflects its belief that Odebrecht Offshore’s financial flexibility has weakened and will likely further deteriorate as a result of lower cash flow available for debt service in the upcoming 12-month period due to the termination of the charter and service contract for semi-submersible drilling unit ODN Tay and the waiver the project obtained on the provisions governing the service agreement that capped operating expenses and capital expenses.

The project has also obtained an additional waiver to use resources from reserve accounts to partly fund the Sept. 1 debt service payment, the agency added.

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