S&P cuts Trinidad Drilling, debt to BB-

S&P said it lowered its long-term corporate credit rating on Trinidad Drilling Ltd. to BB- from BB.

The outlook is stable.

At the same time, the agency downgraded its issue-level rating on the company's senior unsecured debt to BB- from BB. The 4 recovery rating is unchanged, and indicates expected average (30%-50%; in the upper half of the range) recovery in a default scenario.

S&P also revised its financial risk profile assessment on the company to aggressive from significant.

"The downgrade reflects the material deterioration on cash flow adequacy and leverage metrics from the weak industry activity, reduced day rates, and low rig utilization, lowering our financial risk profile assessment on Trinidad," S&P credit analyst Wendell Sacramoni said in a news release.

The lower ratings also represent the agency’s view of Trinidad's participation in the highly volatile contract drilling segment of the oil and gas industry and its strong liquidity profile.

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