Stock Screener: A Look at the Top Offshore Drilling Companies
Credit rating
Credit ratings can change over time as the industry outlook and the company changes. But investors should also remember that changes in credit ratings can lag the market. That means credit ratings may confirm the risk associated with a company but not predict those risks in advance.
Non–investment grade
Moody’s downgraded Ocean Rig (ORIG) to “Caa2” from “Caa1.” A rating of “Caa2” signifies “in poor standing.” Learn more about why the company got downgraded a second time in the short span of three months.
Pacific Drilling (PACD) was downgraded to B2 from B3, and in October 2015, it got further downgraded to Caa2. The downgrade was mainly due to the possibility of a covenant breach.
Transocean (RIG) was downgraded to Ba2 primarily due to uncertainty about future earnings power, sizable debt maturities, and large capital spending commitments beyond 2017. A credit rating of “Ba2” signifies “speculative grade.”
Moody’s downgraded Seadrill Partners (SDLP) to B2 primarily due to high leverage and complex structure with cross default provisions.
Investment grade
Moody’s also downgraded Diamond Offshore (DO) from A3 to Baa2. A higher rating reflects Diamond Offshore’s good liquidity, strong contract coverage, and no debt maturities until 2019. Baa2 signifies “lower medium grade.” Other offshore drillers (IYE) who have a “Baa2” rating are Noble (NE) and Ensco (ESV). Rowan Companies (RDC) has a rating of Baa3.
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