S&P upgrades Millennium Offshore, debt

Standard & Poor's said it raised its long-term corporate credit and senior secured debt ratings on Millennium Offshore Services to B+ from B.

The ratings were removed from CreditWatch positive, where they were placed on Nov. 10.

The outlook is stable.

The agency also raised its rating on the company's $240 million senior secured bank loan and $225 million senior secured notes to B+ from B. The 4 recovery rating on this debt remains unchanged, indicating our expectation of average (30% to 50%) recovery for lenders in the event of a payment default.

S&P said the upgrade reflects its view that the acquisition of Sea Accommodation Resorts Ltd. (Seafox) markedly increases the size of Millennium Offshore’s fleet of offshore jack-up accommodation service vessels and its geographic diversity, which it previously viewed as a rating constraint.

The agency doesn't foresee significant execution risk because Seafox has a very similar profile to Millennium Offshore in terms of assets and client base and because Millennium Offshore intends for Seafox to operate as a separate business unit, retaining current staff.

Seafox also has a strong contract position, which provides good near-term revenue visibility, S&P said.

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