Moody’s ups Transocean, rates notes Caa1

Moody’s Ratings said it upgraded Transocean Inc.'s ratings, including its corporate family rating to B3 from Caa1 and assigned Caa1 ratings to its planned $1.5 billion of priority guaranteed unsecured notes to be sold in tranches due 2029 and 2031. The notes will be unsecured but will be guaranteed by certain Transocean subsidiaries and its parent company Transocean Ltd. The outlook has changed to stable from positive for Transocean and its subsidiaries. The SGL-3 speculative grade liquidity rating was unchanged.

The agency also raised its ratings for Transocean’s senior secured bank credit facility to Ba3 from B1, backed senior secured regular bond/debenture to B1 from B2, backed senior unsecured regular bond/debenture, to Caa1 from Caa2, senior unsecured regular bond/debenture to Caa2 from Caa3 and backed senior unsecured regular bond/debenture to B3 from Caa1.

Concurrently, Moody’s said it lifted the backed senior secured regular bond/debentures ratings of Transocean Poseidon Ltd., Transocean Titan Financing Ltd. and Transocean Aquila Ltd. to B1 from B2.

"The upgrade reflects the good runway Transocean has to achieve meaningful deleveraging over the next several years, supported by a strong and growing backlog and a constructive day-rate environment," commented John Thieroff, a Moody's senior credit officer, in a press release.

The proceeds will be primarily used to refinance notes maturing between 2025 and 2027.

Moody’s said it expects the company to meet expectations for reducing debt over the next 12 to 18 months, given its high percentage of contracted revenue.

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