S&P trims Atwood Oceanics

Standard & Poor’s said it lowered the corporate credit rating on Atwood Oceanics Inc. to B+ from BB. The outlook remains negative.

At the same time, S&P lowered the issue-level rating on the company’s senior unsecured debt to B+ from BB and revised the recovery rating on this debt to 4 from 3, indicating expectations for average (high end of the 30% to 50% range) recovery in the event of a default.

S&P said the downgrade reflects its expectation that Atwood’s credit measures will deteriorate significantly in 2017 and 2018 due to depressed industry conditions, despite S&P’s anticipation of adequate debt ratios for the rating in 2016.

“Our reassessment of the company financial risk profile reflects our anticipation that Atwood’s fleet of jackup rigs will remain idle in 2017 and may struggle to find contracts going into 2018,” said S&P credit analyst Christine Besset in a news release.

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