Moody’s lowers Ensco to Baa2

Moody's Investors Service said it downgraded Ensco plc's senior unsecured rating to Baa2 from Baa1 and affirmed the P-2 commercial paper rating.

The rating outlook is negative. This action concludes the review that was initiated on Aug. 24.

"The downgrade reflects our outlook for a protracted downturn in the offshore drilling industry that will cause Ensco to have significantly lower earnings, higher financial leverage and weaker fleet utilization through 2017," Moody's assistant vice president and analyst Sajjad Alam said in a news release.

"Upstream companies will continue to spend at a reduced level in offshore areas in a challenged oil price environment, and a continuous supply of new rigs will keep dayrates under heavy pressure through 2017."

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