Transocean, the American offshore driller was downgraded to SD by S&P after completing a series of distressed debt exchanges. S&P views the exchange as tantamount to default. It was downgraded to CC from CCC when it had initially made the offer to its bondholders. The exchanges executed are as follows:

  • $73mn of its existing 0.5% bonds due 2023 for $73mn of new 4.625% senior guaranteed exchangeable bonds due 2029

  • ~$43.3mn of 7.25% senior unsecured guaranteed notes due 2025 in exchange for $38.9mn of the new 4.625% 2029s

Transocean also bought back an additional $13.8mn of its 7.25% 2025s at 85% of par value for around $11.7mn cash. All the notes involved in the exchange have been downgraded to D from CC. The drilling company is rated Caa3 by Moody’s.

Transocean’s 7.5% 2031s dipped 0.65 points to trade at 52 cents on the dollar at a yield of 19.08%.

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