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Fitch Affirms Odebrecht Drilling Norbe VIII / IX Ltd., Series 2010-1 at 'BBB'

  Fitch Affirms Odebrecht Drilling Norbe VIII / IX Ltd., Series 2010-1 at
  'BBB'

Business Wire

CHICAGO -- November 6, 2013

Fitch Ratings has affirmed the rating assigned to the 2010-1 notes issued by
Odebrecht Drilling Norbe VIII / IX Ltd. (Odebrecht Drilling) as follows:

--US$1,500 million 2010-1 notes affirmed at 'BBB'; Outlook Stable.

The notes are backed by the flows related to the charter and services
agreements signed with Petroleo Brasileiro S.A. (Petrobras) for the use of the
dynamically positioned ultradeepwater (UDW) drilling rigs Norbe VIII and Norbe
IX. Odebrecht Oleo e Gas S.A. (OOG) is the sponsor of the transaction and
operator of the vessels. The transaction also benefits from a mortgage on both
vessels.

Fitch's rating addresses the timely payment of interest on a semiannual basis
and ultimate payment of principal by legal final maturity. The outstanding
balance of the notes is US$1,387 million and the next debt service payment is
scheduled for December 30, 2013.

KEY RATING DRIVERS

The rating affirmation reflects (i) positive industry dynamics (ii) Petrobras'
credit quality in its role as ultimate offtaker of the vessels; (iii) the
stable uptime performances of Norbe VIII and Norbe IX and Fitch-adjusted debt
service coverage ratios (DSCRs) in line with expectations; and (iv) current
liquidity protections available for the transaction.

The Federal Government of Brazil and Petrobras have passed several initiatives
seeking the development of the local oil and gas industry. UDW rigs are
essential assets for continued research and development of new oil fields in
Brazil. Investments by Petrobras and regulation/legislation imposed by the
government should continue to provide a stable credit environment for sponsors
and protect the value of these assets. Petrobras carries local and foreign
currency issuer default ratings (IDRs) of 'BBB' with Stable Outlook.

From July 2012 through June 2013, Norbe VIII and Norbe IX each achieved
average uptime of 94.4%. Each rig may achieve bonus payments when uptime
performance exceeds 93%. Fitch expects both vessels to operate at 95% uptime
in the long run.

Fitch's adjusted semiannual DSCR, which considers total revenues and operating
expenses (opex) and scheduled principal and interest, averaged 1.22x for the
last two semiannual debt service payment periods, consistent with
expectations. The transaction DSCR, which considers total revenues, budgeted
opex, Offshore Mobilization Fee Account balances and scheduled principal and
interest, averaged 1.36x during the same period.

The transaction benefits from liquidity reserves equivalent to one semiannual
principal and interest amortization debt service payment and three months of
offshore operating and maintenance expenses on each vessel.

RATING SENSITIVITIES

The transaction's rating may be sensitive to the operating performances of
Norbe VIII and Norbe IX and to changes in the credit quality of Petrobras.

Extended periods of downtime that cause Fitch to revise its expected uptime
assumption of 95% would result in lower DSCR expectations and could lead to
rating downgrades. Additionally, the foreign currency IDR assigned to
Petrobras acts as the implied cap to drilling rig transactions in which it
acts as offtaker.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--Global Structured Finance Rating Criteria (May 24, 2013);

--Odebrecht Drilling Norbe VIII/IX Ltd., Series 2010-1 (January 12, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Odebrecht Drilling Norbe VIII/IX Ltd., Series 2010-1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=570505

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=807254

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS
OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
Primary Analyst
Cinthya Ortega, +1-312-606-2373
Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Gregory Lane, +1-312-606-2304
Associate Director
or
Committee Chairperson
Greg Kabance, +1-312-368-2052
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com
 
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