Moody’s Cuts Transocean’s Credit View; Shares Up

This afternoon, credit analyst Ken Austin of Moody’s Investor Services changed his outlook on Transocean’s RIG credit quality from “stable” to “negative,” citing 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" in the Gulf of Mexico. Notably, the BP PLC BP owned Deepwater Horizon rig, which blew up on April 20 in the Gulf of Mexico, was operated by Transocean. “At the very least, 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,” noted Moody’s. The analyst also believes that Transocean will face a higher cost of doing business in the Gulf and day rates around the globe may fall, due to the fact that the six-month moratorium on deepwater gulf drilling has freed up rig capacity. By 1:58 pm, shares of Transocean surged 2.89% to $43.81. Read more from Benzinga's Company news.