S&P lifts Odebrecht Offshore notes to CC

S&P said it raised its rating on Odebrecht Offshore Drilling Finance Ltd.'s (OODFL) notes to CC from D and placed the rating on CreditWatch negative.

S&P said the upgrade follows Odebrecht Offshore’s announcement that it settled the overdue interest payment on its senior secured notes. The payment occurred on April 7, seven days after the 30-day grace period allowed by the indenture.

It is the agency’s understanding that the project is now up to date with the payments on its outstanding debt instruments.

“We continue to view OODFL's capital structure as unsustainable, and believe that the notes are at this point vulnerable to nonpayment on a timely basis,” S&P said in a news release.

“Still, we expect the project to comply with the next two debt service obligations (scheduled for June and September 2017) because it has the available resources in the form of $130 million in letters of credit and cash position. However, else being equal, under our base-case scenario, the risk of non-payment in December 2017 is very high.”

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