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NEW YORK, June 10 (Reuters) - Moody’s Investors Service lowered its outlook for Transocean, Inc (RIG.N) to negative from stable on Thursday, citing growing uncertainty about the impact on the company from its involvement in the major oil spill in the Gulf of Mexico.
Moody’s also affirmed Transocean’s Baa2 senior unsecured ratings and the Prime-2 rating.
“The negative outlook reflects the growing uncertainty surrounding the ultimate effect on Transocean as a result of its involvement in the blowout and continuing oil spill from the Macondo well,” Ken Austin, Moody’s Vice President, was quoted as saying in a statement.
Transocean’s Deepwater Horizon drilling rig exploded and sank in April, killing 11 workers.
The ensuing oil slick in the Gulf of Mexico, the biggest in U.S. history, may prove to be an unprecedented environmental disaster, U.S. President Barack Obama has said.
While the company has not so far been held responsible for the blowout, “Transocean’s costs will increase due to the legal costs incurred to evaluate its liabilities and defend itself in the numerous lawsuits that have been filed against the company,” Moody’s said in a statement.
Credit default swaps for Anadarko Petroleum Corp APC.N and Transocean started trading on an upfront basis on Thursday, indicating increased short-term concerns over their liabilities in the largest U.S. oil spill in history. For more see [ID:nN10229789].
When CDSs trade upfront it indicates that sellers of the protection are demanding more premium at the outset of the contracts to protect against losses, and implies heightened concerns about a company’s credit quality. (Reporting by John Parry; Additional reporting by Karen Brettell; Editing by James Dalgleish)