(The following statement was released by the rating agency)
Dec 07 -
-- Cyprus-based drilling company Songa Offshore SE (Songa) has faced a series of
operating difficulties over the past few months that have led to operational and liquidity
problems, resulting in our downward reassessment of the company's liquidity to "weak" from "less
-- Songa's covenant headroom remains tight and we consider a covenant breach in the coming
quarters as likely in the absence of corrective actions.
-- We are therefore lowering our long-term corporate credit rating on Songa by one notch to
'B-' from 'B', and keeping the rating on CreditWatch negative.
-- The ongoing CreditWatch placement reflects the possibility of us downgrading Songa if it
cannot tackle its tight covenant headroom and successfully sell its Eclipse rig.
On Dec. 7, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit
rating on Cyprus-domiciled drilling company Songa Offshore SE (Songa) to 'B-' from 'B'. We are
keeping the rating on CreditWatch with negative implications, where it was initially placed on
Nov. 6, 2012.
The downgrade follows our decision to revise downward our assessment of Songa's liquidity
position to "weak" from "less than adequate," and reflects what we perceive to be weak
management and governance because of Songa's generally retroactive management approach. In
addition, the downgrade reflects our view that, based on our revised forecast, the projected
credit metrics for Songa are more commensurate with a 'B-' rating.