S&P lowers Odebrecht Offshore

S&P said it lowered its rating on Odebrecht Offshore Drilling Finance Ltd.'s notes to CCC- from CCC.

The agency also said it maintained the rating on CreditWatch negative.

The recovery rating of 5 on the notes is unchanged, indicating 10% to 30% expected default recovery.

The downgrades reflect a view of an increasing risk of non-payment after Odebrecht Offshore announced March 2 that it didn't make the interest payment on its notes of about $32.2 million.

The downgrades also reflect a belief that Odebrecht's financial flexibility continues to deteriorate as a result of lower-than-expected cash flow available for debt service in the upcoming 12-month period due to the early termination of a charter and service contract, the agency explained.

The agency said it perceives a further deterioration of the company's liquidity position and cash flow generation capacity and views its current capital structure as unsustainable.

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