S&P gives B to Transocean notes

S&P said it assigned its B issue-level rating and 2 recovery rating to Transocean Inc.'s proposed $750 million unsecured guaranteed notes due 2025.

Parent company Transocean Ltd. as well as certain subsidiaries of Transocean Inc. will guarantee the notes. The 2 recovery rating indicates an expectation of substantial (70% to 90%; rounded estimate: 85%) recovery to creditors in the event of a payment default.

At the same time, S&P said it revised its recovery rating on Transocean's existing unsecured debt (without subsidiary guarantees) to 4 from 3 and affirmed the B- issue-level rating on this debt. The 4 recovery rating indicates an expectation of average (30% to 50%; rounded estimate: 45%) recovery to creditors in the event of a payment default. The reduction in our recovery expectations primarily reflects the additional amount of priority debt, the agency said.

The issuer credit rating on Transocean Ltd. remains B- with a negative outlook.

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