FEBRUARY 26, 2015
Ratings
agency Moody’s downgraded Transocean debt to junk Thursday after the
company booked over $1 billion in write offs during the fourth quarter.
Switzerland-based Transocean wrote down the value of its contract
drilling unit by $992 billion in its fourth quarter 2014 results,
Reuters said.
The company said the loss was tied to several rig idlings and the
start up of two new ultra-deepwater drillships in the third quarter.
Transocean also took a $148 million impairment charge tied to assets
up for sale and a $9 million charge for the retirement of debt.
The impairment charges left the company with no goodwill on its balance sheet.
The rig operator booked a $739 million loss, or $2.03 per share,
during to fourth quarter, down significantly from a gain of $233 million
during the fourth quarter 2013.
Moody’s downgraded its rating on Transocean’s $9.1 billion debt to
junk citing weak oil prices and the company’s continued spending on new
drill rigs.
“Transocean has been weakly positioned in its rating for the last few
years as it focused on lingering issues related to Macondo, increased
shareholder payouts, and pursued a strategy to revitalize its fleet,”
Moody’s senior credit officer Stuart Miller told Fuel Fix.
Moody’s expects the company’s debt level to rise throughout 2017
“while the market for offshore drilling contractors deteriorates.”
Last week Transocean CEO Steve Newman resigned his post after leading the services player for nearly five years.