Moody's downgrades Weatherford

Moody's Investors Service said it downgraded Weatherford International Ltd.'s probability of default rating to D-PD from Ca-PD following news that the company filed a voluntary petition for relief under Ch. 11 of the U.S. Bankruptcy Code in the Southern District of Texas.

The company's other ratings were affirmed, including the Ca corporate family rating and the Ca (LGD 4) rating on the senior unsecured notes of both Weatherford and Weatherford International, LLC (Delaware).

Weatherford's SGL-4 speculative grade liquidity rating also was affirmed.

The outlook remains negative.

After the downgrade, Moody's said it will withdraw all of Weatherford's ratings.

The downgrades reflect Weatherford's bankruptcy filing on July 1, the agency explained.

The ratings reflect a view on expected recovery, which Moody's said it estimates to be in the 35% to 65% for the unsecured noteholders.

Weatherford is trying to accomplish a comprehensive financial restructuring and reduce roughly $5.85 billion of debt through a pre-packaged Ch. 11 filing, Moody's said.

Prior to its bankruptcy filing, Weatherford was struggling with a very high debt burden and the associated interest costs, weak liquidity, including large debt maturities, and a challenged industry environment, the agency said.

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